Sunday, August 12, 2012

Android: Business models Some Analysis of Downloads

A potential client contacted me the other day to talk about an idea that they have. It's a great idea and wanted to bounce around some business model ideas.  The question that they had was the following:

So, we are trying to figure out for Super App Idea, the kind of download traffic we might get if we were free vs $1 vs $2?  Do you have a feel for that?  I am sure it might be a little different on iPhone as opposed to Android as well.  Do you have any sense of conversion rates  as well?  

I did a quick look for a few apps that had a free version and a paid version. I decided to use a pill tracking system since that was an app I downloaded to test the other day.  The first app was a free pill box app (https://play.google.com/store/apps/details?id=com.mobilepills.pillbox&hl=en) that received between 10,000 and 50,000 downloads.  The first comment was put in on September 2010 so it's been around about 2 years. We'll assume that the first comment was put in right around launch date. So conservatively it is generating about 5000 downloads a year.  Note these downloads don't include downloads from third party distributors like Amazon. At a high end, they've received 25,000 downloads per year

The second one I looked at was a pay to use app that has similar functionality.   This app (https://play.google.com/store/apps/details?id=com.sartuga.android.pillboxalert) received between 1000 and 5000 downloads since their first comment on November 8, 2009. They are selling their app at $1.99. So taking the conservative 1000 downloads, that means that they've received about 300 downloads a year or revenue of about $600 per year. At a high end, they've received 1600 downloads per year or revenue of about $3200 per year.

Based on this example, free apps will get about ten times the downloads as paid apps.

I'm going to create a few more blog entries in the near future taking a look at a couple of ways to potentially increase the downloads if you have a paid application.

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