Business

How to make real money with apps

No matter how you look at it, the world is getting “Appy”. From gaming apps, to photo editing, shopping, social media or security, the app economy has been on a steady growth trajectory, buoyed by increased consumer and business appetite for applications tailor-made for daily engagements.

Last year alone, the number of free apps downloaded stood at around 253 billion, up from 57 billion  in 2012, working out an average of 37 apps per person globally. Interesting also, is that the number of users downloading paid mobile apps has surged. In 2011 alone, 2.89 billion paid apps were downloaded and grew seven fold to 14 billion last year.

This jump has also translated to an increase in app revenue and according to a leading data analytic firm, International Data Corporation (IDC), app revenues are projected to hit $189 billion (Sh19 trillion) in 2020 compared to $69.7 billion (Sh7 trillion). It also means the revenue generated by the global mobile app industry has skyrocketed.

According to trends monitor, Appster, global appetite for apps is not about to get satiated largely because the app client and user base is just getting mature especially in the young markets such as Kenya where the populace are still reluctant to pay for mobile apps.

As more investment is poured into developing apps, the technology will become faster, sleeker and more advanced in regards to functionality.

Expectedly, in Kenya – one of the most tech savvy markets in Africa – the mobile developer population is fast booming as people train guns on the niche market that is still relatively unexploited as there is not enough local apps on our smartphones.

As more and more people invest in apps, the question that lingers on people’s minds is how they will cash in on apps.

According to Mina Reeve, CEO of PR firm, Nami Africa and co-founder of Nia City Young Entrepreneurs (NYCE), apps can fetch good revenues for both developers and app-preneurs.

Reeve, has created the Sports Science Quiz app, an educational app which enables students to learn on-the-go.

Speaking to PD Wikendi, she says although there is huge opportunity to monetise from apps, huge cost of developing it has impeded them.

She argues that depending on the complexity of the app, it can cost in the region of Sh500,000 or even more, money that most people cannot afford.

“The more complicated an app is, the more expensive it will be. I developed mine in UK which cost Sh300,000. For the Sports Science Quiz, I wanted the functionality in a specific way and was eager to get it done before someone else came up with the same idea. In this day and age you need to act fast to stay relevant, and as usual, I wanted to pioneer and set the trend in this field,” she said.

However, one could source developers from tech incubators such as the iLab at a relatively cheaper cost. She outlines a number of ways one could make money from apps.

According to Reeve, one can monetise from apps by requiring people to purchase them before use.

“Kenya is not recognised as a big market for paid apps, hence one would struggle to cash in,” she said.

It comes even as paid apps appear to be the only ones rapidly losing the popularity battle, although they are still proving their worth in some cases.

Additionally, Reeve says one could cash in through in-app purchases which are common in mobile games, as well as various product catalogue apps, which charge a service fee for every item sold.

“This model is so flexible that some games go too far in encouraging users to make purchases,” she says.

This is the most popular monetisation model where firms market their products on your platform. The reason behind its popularity is obvious: Users like to download free apps, and the higher the number of downloads, the greater the developer’s revenue.

A report released by IHS Markit shows that, by 2020, in-app advertising will attract $53.4 billion (Sh5.4 trillion) in total revenue per year. That translates to almost 63 per cent, of mobile display advertising revenue. Thinking of investment, think apps.

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