The Dark Side of App Investment
In the past half a decade, the phenomenal growth of smartphones and tablet computers, has led to the emergence of a new market for apps designed for these devices. Apps cover a variety of topics that ranges from lifestyle to entertainment, education and others. This in turn has led to opportunities for companies ranging from ambitious startups to established technology companies as well as HNIs or High Net-worth Investors who are investing heavily on app development.
The first and foremost question, one must pose is whether one needs an app or a mobile site. If one needs to have an interactive engagement with the users, then mobile app would be the best the way to go. But if one would like to focus on content discovery and ranking on search engines, then mobile website is the best way to go. For instance; a gaming product would suit best for the app because it is interactive.
Recent surveys have indicated that out of the total time spent on digital media, 60% of the time is spent on mobile devices. Apps alone account for 51% of the total duration. Smartphone users spend around 2hrs 40mins on mobile devices, out of which 2hrs 20mins are spent on apps. This shows that users are spending most of their time browsing mobile apps than mobile web-sites. App development is the latest trend; and as of June 2015, the Amazon App Store has around 334,000 apps. No doubt, app investment is a great investment that comes with a lot of potentiality, but there are several factors that needs to be addressed before jumping on the bandwagon. One must keep in mind that 59% of App developers weren't able to recover the cost incurred, and 80% of App development companies
cannot sustain in the market if the focus is only on App development business. Studies have shown that only one out of four apps is being installed and is never used again; which means that, an app is downloaded, browsed and uninstalled within few minutes. One might have developed the best app, but it would prove to be successful only if its marketing is being done aggressively for users' acquisition across different platforms, both offline and online. The performance of an app is highly dependent on factors like competition, budget for marketing and to some extent, luck.
Most of the apps today are replicas of existing ones. Customers are continuously looking for innovation. As competitors are making similar type of apps, the buyers are becoming less interested. Hence, it is the originality of the mobile application development
that counts. Several app developers are unable to recognize the target audience and their intellectual understanding also needs to be analyzed properly. App developers shouldn't be one-sided while developing an app. They need to be broad and come up with a product that caters to kids, youths, homemakers, working professionals and elderly people who are the end users. Innovation in the existing application must not be stopped, considering the changes in technology and trend. No matter how unique your idea is; but if the app is complicated for the end users, it would never succeed. The application should look simple and easy to use at first sight. The features should be decided after analyzing the usability of the application. Discover-ability of an app is another problem as the App Store and Google Play store are full of new inventories, which makes it hard for new and quality apps to get attention, unless their developers spend a fortune on marketing. Good marketing is required to reach a wider range of users. Surveys from Gartner show that users are reluctant to pay up-front for apps, so app developers must try to make money through advertising.
Uber, a mobile ride request company, connects driver with a passenger based on the GPS. Airbnb connects travelers across 34,000 cities by providing unique spaces to stay and rent. Huge success of both Airbnb and Uber has helped developers to create apps for both these websites, leading to their success as the concepts were new to the market.
In this competitive world with millions of apps, your app needs to be unique, fresh and truly different. Hence, it is all about making the right concept and right marketing strategy for your app. App's popularity should be judged by the number of active users and their reviews on Play store and App store. In order to get the return of investment from apps, an App developer needs to win customer loyalty and satisfaction with superior design and performance in the long term. Though organizations may think that smartphone is the right channel for reaching out to customers, but creating a failure-proof mobile app could be challenging and expensive!