should I charge for my iPhone app or Run Ads?

Research Brief just released a report giving some insights on Mobile App market (especially iPhone):

• 24% of Smartphone users have spent anywhere from $10-$50 for a single application,
• 28% have spent between $5-10 on a single app.
• 86% of iPhone owners have paid at most $.99 - $9.99 on a single app
• 83% of these iPhone owners have downloaded at least six

The question for most app developers and marketers is always run into is to make the App free or charge for it? Bottom line developers are seeking higher ROI.

Let’s look how consumers think. Most of the consumers love stuff for free or for cheap. They don’t give a crap about developers, effort and money. However, a recent claim from PitchEngine claims that $5 is not too much for a smart App download. Note the word *not too much*- i.e. only 28% of Smart phone users.

Now let’s explore other option. Have the app for free and earn from advertisement? Basically you are hoping that users will love your content and interact often with app. But most of iPhone users get bored or stop using as frequently in a short while, so now developers are struggling to get pageviews for their app.

At the end it comes down if your app usage going to be high? Does your app has a social and viral effect? Does your apps sends out alerts to users with information which is personal customized to their taste? If yes then I would choose to make the app free or really cheap So that you can keep earning on ad impressions and clicks.

Well if the app is cool and interesting I would choose to charge for the App between $0.99 to $3.99. Assuming that the app has great UI, a good information user is looking access and fun for bit so that users don’t think they got ripped off. I would strongly recommend having Analytics on your app, to better understand your user behavior to make your app stickier.


I am not sure if this holds the same for AppWorld, OviStore and WebOS. Since other mobile platform is just does not make me to browse through the virtual store to shop for Applications (hope OviStore and WebOS would be better than AppWorld when they are out). Well iPhone atleast just makes me to check the virtual Store to check what’s new and cool. Android G1 once while makes me to go check out some apps, not as much as iphone.

Note: This blog post is target to individual developers who has full time or in school and building apps on side. Not for professionals or cooperates.
FYI – I use a BlackBerry, G1, Nokia and the iPhone.

Find me on Twitter @VishalChordia