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Can you make money from apps?

For every Angry Birds, Instagram, Square or Flipboard there are thousands – hundreds of thousands – of apps that sink without trace.  There are a handful of apps making hundreds of thousands of pounds, and hundreds of thousands of apps making only a handful. And the jury is still out on whether customer apps offer businesses ROI: for every success there are myriad apps sitting in the app store without being downloaded, let alone used.

According to a recent study from App Promo[i], more than 50 per cent of all mobile/tablet applications won’t be successful enough to allow the creator to break even. I'm astonished (and sceptical) that anywhere near that many are profitable. Yet recent stats from ABI Research predict that revenues from mobile app store purchases are set to explode, hitting $46bn by 2016[ii]. And what’s more, Apptopia predicts 410 million downloads for iOS and Android combined during Christmas week 2012[iii]

So there is clearly money - and lots of it - out there. But how do you ensure you get your share?

Creating a consumer app

It is possible to make money by creating an app from scratch and selling to consumers – we’re proof of that at iVIP. But it’s not easy. With hundreds of thousands of apps developed every year, the competition is fierce, and it’s critical you set yours apart.

It’s far from as simple as a checklist, but your app needs to meet a real consumer need or exploit a gap; your target market/audience must be thoroughly researched; your app must be unique, and there must be a reason to download it over another; it needs to be fluid, user friendly and well designed; and lastly and perhaps most importantly, your app must be marketed well.

You can’t just launch an app and sit back and watch it rise up the charts. That just doesn’t work.

iVIP is a great example of this. We recognised a gap at the top of the market when all apps were selling for sub £3; we researched and discovered people were willing to pay for exclusive, luxury services; we made our apps unique, not only in what they offered but their positioning – the ‘Millionaires’ app iVIP Black, the most expensive app in the app store, for example – and we ensured the app was designed well with a great user flow. Then we ran a successful PR and marketing campaign on launch.

This has led to a worldwide membership base of over 150,000, a healthy ROI, and a recognised brand, To qualify our success iVIP Black has been the number one grossing lifestyle app in 33 countries and the number one grossing app overall in 9 countries.

So it’s do-able. Extremely difficult, time-consuming, expensive and hazardous; but do-able.

But what about businesses wanting to build one for their customers? 

Cost-effective apps for business

Lots of businesses want to create an app but with a price-tag of anywhere between £25,000 and £1m, not to mention the time, hassle, and resource required, not all of them can.So what are the alternatives?

One is licensing the technology behind well-established apps and plugging in your own content. An off-the-shelf package with tried-and-tested technology allows you to create a quick, hassle-free, tailored app, perfectly suited to your needs. 

We’ve recently made the technology behind iVIP available as a white-label solution for businesses, brands and individuals to do just this. It brings the cost per user down to as little as 1p, making it an extremely cost-effective way of bringing your own app to market with minimal time, money and effort required. The question of whether your business can make ROI on an app is more easily answered when that investment is drastically reduced…

So… Can you make money from apps?

The short answer is yes.

The longer answer is yes, but it’s difficult – if you’re building a consumer app there are manifold concerns and requirements you need to take on board; it will require lots of graft, perhaps a flash of genius, and no little luck.

As a business you may want to look outside traditional development models so as to minimise the investment you’re returning on and doubtless improve the quality of the end product.

The app economy is a minefield inside a maze – navigate carefully.