Evaluate the idea of ​​your mobile application

Disclaimer:
This article is a free-of-charge fiction retelling of the first chapter of the book " App Savvy
Turning ideas into ipad and iphone apps customers really want "

It may interest people who just come to the world of mobile development and think about where to start. If you are an experienced businessman, already having a stable income from their own mobile applications - most likely, it will seem to you useless and obvious.


In order to fully appreciate the viability of the idea of ​​your application, you first need to understand the current situation with applications in the App Store, estimate the cost of launching your application, and realistic look at the possibility of your application getting into the App Store directory. By "you" and "your idea" I mean not only you personally, but all the people - relatives, friends and colleagues - with whom you are working on your idea. Whether you are evaluating an idea alone, or with someone, I want to offer you a scheme, following which you can get a more structured assessment of your application. At the end of the article you will find links to useful resources and tools that will help you evaluate your idea.

1. Explore the App Store

The App Store is the place where your idea evaluation begins. It doesn’t matter whether you use the App Store via iTunes or as an application for iPad, iPhone or iPod Touch - in any case, you should understand that for you this is not at all the place where applications are searched and downloaded. For you, the App Store is a battlefield, it is an opportunity to conduct reconnaissance behind enemy lines and to understand what they are doing right (and what not).

Make continuous research on the App Store your primary focus. Apple usually substantially updates the New and Interesting section toward the end of the week. This section includes a very small part of applications that are carefully selected by Apple employees and advertised in all application stores for a week. A close look at this section is a great way to understand which apps Apple thinks is interesting and unique. Keep an eye on this section and you will always be up to date with current trends.

Take a look at the applications that fall into this section, and you will find a pattern - they are all simple, creative, have a high-quality design and are well made. Unique applications do not necessarily fall into this section, but applications that somehow turn out to be better than all similar offers fall there.

Categories and Search

All applications in the catalog are divided into categories, and each developer independently chooses the category and subcategory for his application. Choosing a category for the application is an important strategic decision. The book, games, and entertainment categories already contain many applications, and the competition in these categories is very strong. If your application can belong to both the Entertainment category and the Lifestyle category, placing it in a less saturated section will give you more chances to get into one of the Top Applications list. You can use 148 Apps to view statistics by category and get the most complete picture of the fullness of categories.

In addition to browsing the application by category, use the App Store search function to find applications that are similar to your idea. Try typing in various keywords - that describe your idea, the features of your application, or typical uses for it. Keep in mind that when searching for keywords, the App Store sorts applications by popularity - this will allow you to identify your key competitors.

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You can use special resources such as appsaurus.net , www.appolicious.com and appadvice.com to keep track of current trends and keep abreast of the hottest new mobile app stores.

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App Store App Page and User Reviews

When you have found all your competitors, carefully study the descriptions of their applications and reviews about them. Pay attention to how your successful competitors write descriptions of their products, what key functions they highlight and what features they emphasize when creating screenshots.

From the reviews you can get more information about how users use this application, which features they like and which they consider redundant. This will help you when you think through the functionality of your own application.

Regular research

After you study all the search results and look at all the applications of competitors, it may seem to you that your research is finished. Remember that this is not so - after all, hundreds and thousands of applications are added to the App Store every day. Therefore, you need to browse the App Store regularly. Use sorting by release date to track new interesting offers that will appear in your categories.

But in no case do not become a fanatical consumer of the App Store. Remember that you are only studying it. For example, you don’t have to buy all the paid applications of your subject at all - just limit yourself to the most popular ones. This will allow you to evaluate the whole situation, without spending too much money.

Also remember that when you study the App Store, you won’t be able to figure out how to make an excellent application. The study will help you to feel the market, understand what is currently in demand, find out which niches already have strong competition, and which are not already occupied. At the same time, it is not necessary to abandon the idea if it has many competitors - because you can probably make an application that will be better than any other - and the already typed history of reviews about your competitors will help you with this. Also, do not rush headlong into spheres in which there are very few applications or there are none at all - most likely, nobody is there, not because you came up with this brilliant idea first, but because these applications are not in demand by anyone. If you still decide to come to one of these extremes,

2. Evaluate the profitability of your application

After exploring the App Store, you need to proceed to the next step - evaluating your application. As already mentioned, the creation of the application requires time, effort and money, so the assessment is one of the key steps in developing your idea.

Before proceeding to the assessment process, I want to highlight 2 points that are not the purpose of our assessment:

1. Estimated number of downloads. We will not do this because it is impossible to estimate the number of downloads. Too many different external factors can affect your application’s downloads.
2. What features of the application can guarantee you downloads? We will also not consider this issue in the process of evaluating the application, because at the moment we are at the stage of evaluating the idea. The process of thinking through the functionality of the application will be described in detail in the third chapter of this book.

Make sure that you are confident in understanding why you are starting to create a mobile application. Are you pursuing personal goals or corporate goals? Is your goal to maximize your downloads or profits? Do you want to create something new or complement an existing product? Decide on your goals, because they will affect the process of evaluating your application and choosing a monetization model for it.

Choosing a Monetization Model

Many websites lost their profit due to the lack of convenient and easy payment methods - and this was a big problem for the Internet. But in the App Store this problem is solved - after all, payment is made through your iTunes account. Apple claims they have more than 150 million plastic cards in their database.

Initially, Apple assumed that applications could be paid and free. It is also possible to make purchases within the application (In App Purchase), which allows your users to buy something directly from the application. At first, this function was available only for paid applications, but subsequently Apple removed this restriction, and now there is also the opportunity to sell something in free applications.

Having such a small selection of options, it may seem to you that choosing a monetization model for an application is very simple, but it is not. The opening of the opportunity to make purchases within the application for free applications, as well as the entry into the iPad market, fundamentally changed the view of developers on the process of monetization and distribution of applications. Entrepreneurs also saw the opportunity to make money selling ads on iPhones - and Apple joined the game by purchasing the Quattro Wireless advertising platform in January 2010. The result of this merger was the iAd platform, which became part of iOS 4.

Consider the main types of application monetization models:

Free application
Perhaps the proposal to distribute your application for free will surprise you - because why give away for free what you spent so much effort on? You can get the answer to this question when you think about your goals.

The App Store may just be another place of presence for your organization. In such a situation, it is not so important to make money from the application itself. For example, the Gap application is free, because their main task is to sell clothes through the application. Facebook - one of the most popular applications in the Communication category - is free because it is a client for a free site. Salvation Army applications are free, because their goal is to bring information to as many people as possible
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Free app with ads
I want to immediately warn you that the decision to monetize your application, making it free with advertising, may be wrong. If you don’t have a lot of different applications, and you don’t have a very popular application to sell ads in it - most likely you can earn more if you set a normal price for your application.

Most in-app advertising options, including iAd, take up to 40% of revenue as a commission. If you decide to add ads to your application - make sure that it is not too intrusive. Make sure that the theme of the displayed advertising matches the theme of your application - this will help you avoid user dissatisfaction. The Pandora music app is a good example of how to correctly add ads to your app.

Paid app
Paid apps are Apple’s second monetization method. Apple charges a 30% commission on every sale of your application. As discussed in Chapter Seven, Apple uses a multi-level pricing model in which prices range from $ 0.99 to $ 999. The right pricing for your application is both art and science. This is one of those factors that can quickly increase the number of downloads, thus increasing your earnings. A little further in this article I will talk about pricing in more detail, and the issue of advertising pricing strategies will be discussed in the eighth chapter.

Lite and Pro
A common practice is also the ability to give the user a try of your application before purchasing. One of the main topics of criticism of the App Store is the inability to download a demo application before buying. Buyers can not evaluate the application before buying, and are forced to pay for what it turns out they do not need.

Although now this method of monetization is losing popularity due to the opportunity to make purchases from free applications, before, many developers kept two versions of their application in the App Store - paid and free. Free versions usually did not have part of the capabilities, or were somewhat limited (for example, only the first level could be completed in the game).

In-App Purchases
In-app purchases are Apple's latest official way to monetize apps. Just like with paid applications, Apple will take 30% of each sale. After Apple was allowed to make sales inside free applications, the popularity of the Lite and Pro model quickly fell. Many developers began selling advanced application features or additional levels in games through the In App Purchases tool. Using this feature, compared to Lite and Pro, gives developers much more opportunities to control the behavior of their users.

New versions
The person who bought your application gets it forever. You can continue to improve your application and release updates for it - all your customers will receive these updates for free.

This moment becomes another stumbling block for developers - because taking extra money from a user for a new, significantly improved version of the application is normal practice. If you use the App Store, and do not use sales within the application, then all the money you receive during the use of your application is its initial cost. If we are talking about the application for $ 0.99, then you will get $ 0.70 and not a cent more.

Many developers believe that such a system is not very suitable for them. Then, after significant improvements to the application, over a period of time, they release a completely new version of the application, under a new name.

There are two good examples of this approach - the popular Twitter client called Tweetie (which now belongs to Twitter and is called Twitter for iPhone) and the Enigmo puzzle game. In the case of Tweetie, the developer Loren Britcher spent so much time developing the next version of his application that he decided to remove the first version from the App Store altogether after launching Tweetie 2. Enigmo decided not to contrast the two versions with each other, and suggested that Enigmo 2 be considered continuation of the series. Both Enigmo and Enigmo 2 are currently available on the App Store.

It is worth emphasizing once again that the Tweetie act was very bold. Despite removing the first version from the App Store, you still cannot reuse its name. You will also lose all ratings and user reviews. Be very careful when making this decision. Although you can make more money, with this step you can scare away your existing users and lose their trust.

Also, the practice of releasing “new” versions of applications became even more common after the release of the iPad - the developers quickly realized that adapting the iPhone application to the iPad can often be a nontrivial task, and supporting universal applications when the same application can be launched on the iPhone and iPad is a rather time-consuming process. Therefore, developers began to add the prefix “HD” or “for iPad” to the name of their application and release additional paid versions for the iPad. Typically, the HD prefix is ​​used for games, and "for iPad" - for applications. An example of such an adaptation is the version of the popular Flight Control game, the iPad version of which was released under the name Flight Control HD.

To summarize in the form of a table:

Type of monetization	When used	Examples
Free app	Used for corporate applications, or when selling an application is not an end in itself	The Gap, Facebook, The Salvation Army Bellringer
Free app with ads	Used in popular applications that actively interact with the user.	Pandora, Flixster
Paid application	The most popular way to monetize. 70% of the total income goes to the developer	-
Lite and Pro	An unofficial way to give the user the opportunity to test the application before purchasing.	Labyrinth Lite, Labyrinth
In App Purchases	Used to enable users to buy new features from the application.	We Rule, Boxcar
New versions	An unofficial method to persuade the user to purchase a new version of the application in order to recoup the costs of its development. Also used when releasing versions for the iPad.	Enigmo, Enigmo 2 Flight Control, Flight Control HD

Pricing

At this stage, it is important for you to understand what price you will charge for your application. In the process of researching the App Store, you already saw the prices of competitors, which gives you some understanding of the market. For example, if your competitors sell their apps for $ 3.99, it would be a bad idea to set your price at $ 14.99. But you can easily request $ 6.99 for it if your application really will be so much better.

When pricing, also take into account the current trends of the App Store - because the price will directly affect the number of downloads. Small price changes, such as switching between $ 1.99 and $ 0.99, can significantly increase the number of downloads. I want to say that there are basic prices that most assign to their applications in the App Store. A typical iPhone app costs $ 1.99. IPad applications usually offer more features, which is why they cost more - the average price for such an application is $ 4.99, which is closer to the usual prices for personal computer software.

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Beware of setting a price of $ 0.99 dollars - too low a price can lead to impulsive purchases when a person buys your application without really realizing what he will use it for. This can lead to a decrease in the rating of your application and the appearance of negative reviews, because people will not receive what they expected.

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You should consider different pricing options, especially if you intend to invest in the App Store for a long time. Suppose you assign a price of $ 2.99 to your application. Suppose that your application will be downloaded on average by 15 people a day - then for the year the total income of your application will be approximately $ 16,000 (15 * 365 * 2.99), after deducting a commission, you will have $ 11,000 left. Suppose you increase the price by a third - up to $ 3.99 - and your downloads fall by the same third. It seems that in this situation, you can potentially earn $ 12,500 (about $ 18,000 of total income).

Unfortunately, this is not the case. In 2009, Distimo conducted a very significant experiment. The game, which was in the top 5 in the ranking of popular games, they increased the price from $ 0.99 to $ 1.99. Very quickly after that, the game began to lose its rating, and in just a few days it flew out of the top25, which significantly reduced its visibility. Due to the fact that fewer people began to see the game in the App Store, its number of downloads fell very much, while the author’s income also decreased. You should also try experimenting with the price to see which one will give you the maximum downloads. This will not necessarily be the lowest price in your category - for example, in the top 15 games you can notice offers for both 99 and 169 rubles.

If you develop only one application, you are unlikely to be able to afford price experiments - it will directly affect your income. But when you have already typed the portfolio of applications - you can put such experiments and achieve in each case more success than any of your competitors.

Assessing the ideal situation for your application

When you have decided on the idea of ​​the application, monetization method, type of application and price - you can proceed to assess the market opportunities of your application. One way to do this is to evaluate the size of your application’s target market . Speaking about the target market , unlike the target audience, I’m not talking about the number of people who may be potentially interested in your application, but about the number of people who may potentially buy it. Assessing the target market is an approximate way to estimate the maximum income from your application, which you can get in an ideal situation.

Jonathan Wegener wrote very well on how to evaluate the market for your application in his article The Definitive Guide to iPhone App Market Sizing. Jonathan is the author of the Exit Strategy NYC app, which allows metro passengers to plan their way to get through the metro as soon as possible. For example, you ask the station where you want to exit - and the application tells you which car door is best to stand at, in order to be directly opposite the exit.

The algorithm for calculating the target market is approximately the following (all numbers are relevant as of April 2010):

1. In total, 50 million iPhones and 35 million iPod Touch were sold worldwide.
2. Our application is available on both devices - hence we have 85 million potential users. That is, at a price of $ 1, we can potentially earn 85 million. But we must remember that our application is addressed to metro passengers in New York.
3. According to AdMob statistics, 50% of devices are in the US, which gives us approximately 43 million. In total, 300 million people live in the USA, which means that about 21.5% of Americans have the devices that interest us.
4. New York City has 8 million people, and 5 of them ride the subway. Thus, the target audience of our application is 5 million people, which again gives us a rather impressive amount of 5 million potential revenue!
5. However, now we need to multiply the number of metro passengers by 21.5% of iPhone users and we will already receive only 1.3 million devices that are in the hands of passengers.
6. But how many people buy apps? Let's look at the statistics of the best-selling games and we will see that out of 80 million Doodle Jump devices, approximately 4% are installed.
7. Now we multiply 1.3 million by 4% and get 52,000 people - this is the number of people who will install our application in the best scenario . And our final maximum income is not 85 million, and not even 1.3 - but only 52 thousand dollars. And don't forget to deduct 30% commission from Apple.

If you plan to release an application with purchases within the application, use the total cost of all products that can be purchased in it to evaluate. Whether you plan to release a universal version for the iPhone and iPad, or two different applications - in any case, do not forget to take this into account in the calculations.

You should not focus only on sales - similar calculations can show you how many users of the free application you can count on.

I want to remind you once again that evaluating the target market is not an estimate of the amount you should rely on. You can earn all this amount only in the best scenario. This rating is an opportunity for you to evaluate the potential of the application in the event that every person who may be interested in your application will buy it.

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There are several open sources from which you can draw useful statistics.

Google created an amazing tool in its power: www.google.com/think/tools/databoard.html A detailed description of this tool will take more than one article, so for now I can only recommend you try it yourself - it has a fairly clear and simple interface.

Flurry uploads a lot of statistics on his blog: blog.flurry.com . You can also get a lot of useful information on the Distimo website: www.distimo.com/publications

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An interesting tool for business planning and pricing assistance is the App Cooker. You can try:
www.appcooker.com/overview/estimate-the-cost-effectiveness-of-iphone-and-ipad-apps

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Assessment of yourself and your abilities

You may have a super-idea application for the iPhone and iPad, with a huge target market, but if you cannot realize your idea, it costs nothing. True, it is worth noting that if you yourself can not do something - most likely you can find someone who can do it for you.

In addition, carefully look again - perhaps out of inexperience, or maybe from a surplus of courage, you want to make a product identical to what is already on the market. Should not be doing that.

Look in the mirror

An ideal situation for you would be if you have both experience in the field in which you launch the product and experience in the production of IT products. If you do not have either experience, it will be very difficult for you.

It will be great if your ideas are born out of your everyday tasks and difficulties - in such a situation you will understand how people will use your application and what they will think about in the process of using. Of course, you can take advantage of the opportunity to receive feedback from potential users throughout the development process - from the very beginning of work on the application fast prototypeswill help you with this. But if you yourself will be a user of your own application - this will help you keep in mind a more holistic picture. Good knowledge of your market or industry for which you are developing an application will also help you, including through established relationships with customers and the press.

If your idea goes beyond your competencies, try to first consult with experts from your area of ​​interest. Then your task will be greatly simplified - because it will be the same as working with the person who will use your application.

If you have never made websites, software, or other digital products, such as mobile applications, it’s best to also find yourself in the team of designers and developers who have real experience in developing applications similar to yours.

Look at the watch ... and the wallet

So far, you don’t know how much it will cost to develop your application ... or you think that it does not matter. It may seem to you that the development for you is absolutely free - because you are creating your application at work or with friends. In fact, in both of these cases there is a price - just in the first case, your employer pays the bills, and in the second case, while implementing your idea, you and your friends lose the opportunity to do something else.

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It is unlikely that a quality application will cost you less than $ 10,000. This assessment is based on the fact that a good application should be sufficiently functional and at the same time provide an integrated approach to the problem being solved - which means that its development requires considerable effort, knowledge and experience.

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If you do not spend money from your wallet on the application, remember that when you start implementing your idea, you are in any case committing yourself. A commitment to bring your application to download on the App Store. And if you develop the application on your own or with friends, this obligation will cost you sleepless nights and missed days off. If you are developing an application in a company - most likely, mobile development will become for you one of the important areas of activity that constantly requires investment.

Money is not the only thing you lose if you launch your application unsuccessfully. Remember that most of the applications in the App Store do not even earn $ 700 - and you will understand that you should not invest too much time and effort in a single application. Be firm when developing your first application, don’t put too much in development budget and let your idea to prove itself in the App Store before starting to make serious investments in it.

useful links

148apps App Store Metrics
appsaurus.net
www.appolicious.com
appadvice.com
The Definitive Guide to iPhone App Market Sizing
www.google.com/think/tools/databoard.html
blog.flurry.com
www.distimo.com/publications
www. appcooker.com/overview/estimate-the-cost-effectiveness-of-iphone-and-ipad-apps