How to keep producing relevant software:
Every new technological advancement brings with it opportunities for new and existing companies and creators to push the boundaries of what is possible as well as making money in the process. The most successful creators are those who deliver something innovative and exciting to consumers which provides a new service or form of entertainment which they not previously considered.
In the seven years since smartphones first became a realised technology, there has been a brand new branch to digital technology, namely mobile applications. This is a market which has only been strengthened by the rise in tablet computing and the drive towards apps for productivity as well as for entertainment.
The marketplace for applications has been growing exponentially and has breathed new life into the portable gaming industry. The revenue streams from applications come largely from either the small fee which users pay to purchase the app or from advertising within free applications. There has also been a trend in recent years towards ‘in-app’ purchases. Whereby users can play a game entirely free but they are given the opportunity to purchase additional extras which can better enhance their experience.
The financial success of applications comes from the fact they are often very cheap to buy, and where in-app purchases are made, these too are built on the ‘small but often’ model of users spending small amounts of money on repeated occasions over an extended period of time.
This is a model which has worked extremely well up until now, but is there a tipping point looming? There has been some evidence that users are tending to use their devices less than before as well as becoming more wise to the potentially high costs of in-apps purchases.
This, combined with the increasing number of would-be developers who are submitting their applications for consideration, it is not unlikely that we could see an application ‘crash’ in the not too distant future. This is not to say that users would cease to buy applications altogether, rather that they would become significantly more reserved in the applications which they purchase and use.
Obviously, if the developer’s main income source from an application is from user purchases then this will present an immediate decline their profits. If the central revenue stream is from advertising then it will take longer for the effects to be felt. However, if advertisers become aware of declining numbers of users for a certain application then they are likely to reduce or potentially cease their investment in that application.
In the next few articles, we will be looking at the different areas for which you can develop apps and whether targeted developing is the future for developers. Instead of creating a mainstream, low-cost product which is aimed at a large audience, could creating bespoke applications for different businesses and institutions (i.e. schools and universities) be the future for application developers?
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