monetization

Developers devote a lot of attention to the time immediately after an app is launched. How quickly is it growing? Will it go viral? How is it ranking in app stores? While that launch period is critical, managing apps well throughout their entire lifecycle means also paying special attention to what happens after an app peaks. Does it decline precipitously or manage to hold much of its audience for a long time?

Smartphones and tablets continue to break new consumer technology adoption records.  From earlier research, Flurry found that iOS and Android smart devices have experienced twice the uptake rate compared to that of Internet adoption, and four times the rate compared to that of PC adoption.  Following this unprecedented adoption, advertising dollars are beginning to flow into mobile.

The ability for developers to offer in-app-purchases within paid iPhone apps, as part of iPhone OS 3.0, creates exciting new revenue opportunities. At the same time, the option to sell virtual goods, additional game levels, subscriptions and other forms of micro-transactions, creates more complexity around how to best monetize a given application. Developers who can quickly and effectively measure and optimize the impact of these new pricing options will emerge as winners in the next phase of the iPhone economy.

Among your strongest marketing plays in the App Store is to offer a free trial of your game or application. Not only is the App Store designed for this, but also it’s the best way to reduce consumer risk in trying your application, with the goal of eventually getting that user to purchase the full version. Think: money. And from our data, it’s among the most effective moves you can make. Here’s a motivational example using customer data collected using Flurry’s mobile app analytics service in their iPhone apps.

The glut of applications in the App Store has made application discovery a top concern among companies releasing iPhone games and apps. Last week, 148 Apps reported that more 30,000games and applications are available in the store, already 5,000 more than the 25,000 announced by Apple when it previewed its iPhone OS 3.0 software on March 17.

The App Store’s unprecedented success has certainly created “poster-child” success stories like iShoot and Trism (for the record, we love and play the both of those games!). At the same time, Apple recently announced that over 25,000 applications are available in the iPhone App Store and that over 50,000 paid developers are in their SDK program.  Given these figures, many wonder if increased competition has created an insurmountable barrier-to-entry for additional success stories.