The Changing Economics of App Development

Some interesting new research released this week by Priori Data, a mobile app store intelligence company headquartered in Berlin, and Pollen VC, a FinTech company helping app developers and companies realize app store revenues, sheds light on an emerging "middle class" of app developers and examines how many million-dollar apps there really are.

Harvard Business Review has posted an excellent summary of the findings:

Among the key takeaways:

* A snapshot of the data produced in the first phase of the research program known as the Millionaire Index reveals that a total of 1,887 app developers and companies have already generated $1 million in revenues from a mix of app purchases and in-app purchases in the last 12 months.

* The research confirms the rapid advance of a “long tail” of app developers and companies, a new segment of developers proving that many of these apps benefit over time from tapping specific audiences and consumer tastes that run outside the mainstream (like the types of niche audiences that might like indie music or genre-specific games).

* Understanding app store optimization is high on the agenda as developers and companies invest in the tools and talent to optimize mobile apps. They believe that higher rank leads to increased visibility, which tends to translate into more traffic and more downloads

* Interestingly, the TUNE survey shows, it is word-of-mouth and advertising that motivate users to search for apps in the first place. A significant number of users look for apps by name, suggesting that they are becoming accustomed to seeing apps as brands. So even though advertising can stretch a smaller budget, it still matters for reaching new users.

* App developers and companies will need to continue to think strategically about new ways to bridge the “funding gap” — the time between making a sale and getting paid by the app store. They will need to be more flexible than ever and know exactly who their audience is and how to best reach them.

Appcentric Software is committed to creating Apps for our clients that not only meet their unique business needs, but also maximize the visibility of the App (and, consequently, the brand/company) in the venue (App Store, Google Play, etc) where it is purchased. 

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