Free vs Sold Applications

apple.gifIn February, I commented on Michael Mace’s observation that Mobile Applications were dead.

I explained how mobile applications have changed. It’s no longer about selling an application – which I would say is in retirement rather than dead. It’s more about providing an application free of charge to either promote a brand, tie in with a web or PC service or gaining revenue another way, for example through advertising. All the applications I have worked with recently are of this kind.

With the advent of the Apple iPhone store (and possibly an Android store), I am not the only one wondering if selling applications will come out of retirement. Some people have estimated the market to be worth $1.2 Billion in 2009. I don’t think so.

As I see it, there are probably two main reasons why currently very few applications are actually sold…

  • There’s no ecosystem for sales – easy discovery, payment and delivery
  • There’s no mass market inclination to buy applications

If an informal study of current iPhone developers is of any indication, 70% of the initial iPhone applications will be free.

My experience is that the cheaper the phone, the less likely the user is to buy an add-on (UIQ, S60, Windows Mobile, Java) application. As the iPhone becomes less expensive, we might actually be tapping into users that are less likely to buy applications. Then again, we must remember this is Apple and the iTunes download culture might just encourage application downloads.