Nobody wants to pay for apps, says study

Written By Kom Limpulnam on Jumat, 17 Januari 2014 | 15.20

Bad news for developers trying to build the next Candy Crush. From now until 2018, only 0.01 percent of apps will be considered a financial success, according to a study by research firm Gartner. 

That is despite a boom in smartphone subscriptions, which are expected to hit 5.9 billion by 2019, according to predictions from Ericsson.

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If there are going to be so many smartphones, why will there be so few profits? Because there are a lot of freely quality apps out there, and consumers are used to getting something for nothing.  

In fact, 94.5 percent of apps downloaded in 2017 will be free, according to Gartner. Companies release free apps for a variety of reasons. Some are just branding opportunities. (Yes, NBC News has an app). Others rely on upgraded subscriptions, like OKCupid, or in-game purchases for revenue - sometimes to the consternation of parents who are forced to pay for their children's "Smurfberry" addiction. There are also plenty of apps that want to follow the Instagram model and hook millions of users with a cool concept before introducing advertising. 

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Regardless of the reasons why, there are a lot of amazing apps - like Ultravisual, Duolingoand Venmo - that you can download now without spending a cent. Even if a company can create an app that people might like, getting it to consumers is another problem. As the Gartner study notes, people are "increasingly turning to recommendation engines, friends, social networking or advertising to discover mobile applications rather than sorting through the thousands of mobile apps available."Unless you have a big social media presence and plenty of ad dollars, it can be hard to break into the mainstream. 

"There are so many applications that are free and that will never directly generate revenue," Ken Dulaney, vice president at Gartner, wrote in the study. "This is only going to get worse in the future when there will be even greater competition, especially in successful markets."


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