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Pricing strategies for iOS applications

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  • 1. Pricing Strategies for iOS Applications By: Shailendra Sinhasane Twitter: @sunshail Mobisoft Infotech LLC
  • 2. Why Monetize?• Generate money• How? – Compulsion Loops, there are ways to draw user back into the app – Engagement, does it have engagement elements that could be monetized, i.e. virtual currency? – Value, is it worth your users’ time?
  • 3. Some numbers ~• 40-45% of all iOS revenues are from in-app purchases• Only 10% from advertising• Near about 50% of the games downloaded from the app store were free with in-app purchase integrated• In-app purchases will grow exponentially in coming years
  • 4. Download estimates Estimated download volume needed for Top 100 ranking: App Store Position Est. # Downloads NeededTop 10 ~50k-150kTop 25 ~30k-50kTop 25-50 ~17k-30kTop 50-100 ~10k-17kSub 100 Free 100s-depending on category popularity -Source: AdMob, Inc.
  • 5. Models1. In-app purchases2. Subscription3. Ads4. Location-based offerings5. Social media sharing and aggregation
  • 6. To do1. Try various in-app models to find the combination that maximize your revenues• Games: Subscription based casual gaming package + premium payment for sending best scores• E-books for kids: read once for free. Pay to read again• Security: free trial (30 days) . Paid license for 1 year period• Video: pay per gallery2. Freemium strategy• Strongest marketing play• Risk reduction• Developers should be focused on finding consumers who are willing to pay, not trying to completely satisfy free-rider consumers
  • 7. In-App single purchasePros:• This is probably the easiest path to implementation and launch and its straightforward and proven• Virtual goods/currency through In-AppCons:• No ongoing revenue stream• No access to user data - makes selling advertising difficult. One potential workaround is to build in-app surveys, which pushes data back.
  • 8. Subscription - IPros:• Revenue is sustainable• Renew just as other web based subscriptions• Easy extendable as an add-onCons:• Requires user management solution• Requires users to leave the app and visit the publishers website to subscribe• Conversion rate lower than in-app purchases• Success :lifetime value of a subscriber > revenue lost from lower conversion
  • 9. Subscription - IIApples subscription policy for publishers:• Apple still gets a 30% cut of any subscription a reader signs up for inside the App Store.• Publishers can now offer an app subscription for a different price than what they might sell their app for in the App Store.• Publishers cant link to an external-to-Apple location that sells a subscription within the app.
  • 10. AdvertisingApple: iAd platform – Adv as an appThird party : adMob, Medialets etcPros: Easier to command advertising premiums and less pressure to live up to metricsCons:• Mobile budgets just arent well-defined• Apple changes strategic decision with third party ad integration
  • 11. Location Based OfferingsPros: Awesome mobile offerings into a high-fidelity advertising environmentCons:• Complexity in integrating these systems• Requires the device be connected to the internet
  • 12. Social, Sharing & AggregationPros:• Cost-effective• Viral marketing• Better user engagementCons: Getting advertiser support on a product as nebulous as this is challenging
  • 13. Other payment integrations• Paypal API integrations• Carrier billing option – Very easy for users to pay• Virtual credits• Google Checkout
  • 14. other mobile platforms1 MoVend payment platform• Easy integration – Supports Android, BlackBerry, Windows Phone7• Sales Track• Better user engagement2 Bango• Supports all mobileplatforms includingiOS• Operator billing
  • 15. Thank You!Connect:Email: shail@mobisoftinfotech.comTwitter: @mobisoftinfoBlog: mobisoftinfotech.com/blog