I haven’t bought an app from the App Store for several months. And, unless an app is of exceptional quality and has brilliant reviews, I will not do so. I suspect that other App Store customers now think in the same way. There is so much great free content out there, why pay upfront for an app?
To me, it seems inevitable that the freemium business model will continue to thrive on the App Store. This is great news for consumers: they will have plenty of opportunity to try an app before they pay a cent. But, is this a good thing for developers? I would say, yes and no.
No because, as a developer, you will be forced to work even harder and give away more content for free in order to attract customers.
Yes because free apps allow customers to download and try without risk. This will inevitably lead to a larger number of downloads than a paid app. Once a customer has downloaded your app you have an opportunity to convince them to buy something via in app purchase. So, you give more away for free but have a larger pool of customers to monetize – and you have a better chance of doing so once they have invested some of their time in your app.
So, is the future of the App Store going to be free? I believe largely, yes. I am interested to see the new ways developers and advertisers will find to monetize free apps. At the moment, IAPs are particularly well suited to resource management games with disposable content. I feel that other types of app need to find a method of monetization that will increase profitability for developers. And this is where the next wave of innovation on the App Store might begin…
For games, I believe you may be right, but not in the rest of the store. People tend to forget the non-game side of the store, where it’s never been a gold-rush, hit-the-jackpot sort of situation. There will always be money to be made in quality non-game apps that solve meaningful problems and help people be better at what they do. The challenge is, of course, in the marketing, just like in the rest of the world. A great product (or app) that no one knows about makes no money.