mobile application monetization strategy
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mLab
Southern Africa 9 February 2012
Ben Zaaiman
mLab’s Purpose
The mLab encourages and supports mobile innovators & entrepreneurs to grow their ideas to full impact.
The mLab advocates for and supports the use of the mobile channel in service delivery.
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mLab’s Doors Have Been Open
Since August 2011
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4
Mobile Has Become the Dominant
ICT Client
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The Economist – 8 Oct 2011
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7
(Smartphone Sales in the U.S.)
Nokia & Samsung Ship the Bulk of
Phones in the World
Nokia 26%
Samsung 21%
Apple 6%
LG 5%
Other 42%
Global Shipments Q4 2011
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Research & Markets – Jan 2012
Global Revenue is Split Between
Apple, Samsung, Nokia
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Apple Takes 75% of Global Profit
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Why?
Multisided Markets Drive
Monetisation Strategy
You
Users
Advert-isers
Deve-lopers
Data Miners
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Facebook Didn’t Make Billions
Charging Users
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0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
45.0%
50.0%
Q3:0
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Q4:0
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Q1:0
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Q2:0
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Q3:0
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Q4:0
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Q1:0
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Q2:0
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Q3:0
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Q4:0
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Q2:0
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Q3:0
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Q4:0
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Q1:1
0
Q2:1
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Q3:1
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Q4:1
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Q1:1
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Q2:1
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Q3:1
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U.S. Share of Time Spent on Platform Sites
AOL Microsoft Yahoo! Google Facebook
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Somebody is Going
to Make BIG Money
in This Industry...
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Enterprise Solutions
Consumer Apps
Mobile Marketing
Consumer Services
Contracting Proprietary
Products
Services
The Start-Up Pyramid
Scale
Optimize
Economics
Promise
Product / Market Fit
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Monetisation
Strategy
40% of Big Market
Minimum Viable Product
for “Must-Haves”
Source: Marc Andreessen
mLab Mobile App Monetisation
Framework
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Number of Apps in iTunes Store (April 2011 - 30 Months after Start)
0
50 000
100 000
150 000
200 000
250 000
300 000
350 000
iPhone iPad
Free
Paid
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Ben Lorica: O’Reilly Research, 2011
Games Dominate the Industry
0%
10%
20%
30%
40%
50%
60%
Top 100 Top 1 000 Top 10 000
% Games in All-Time Rankings of iTunes Store
iPhone
iPad
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Ben Lorica: O’Reilly Research, 2011
Sturgeon’s Law Also Applies to the
iTunes Store
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But You Should Find Out Pretty
Quickly if You Have a Hit
Top Paid Top Grossing Top Free
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9
4 5
4
14
Median Days From Launch to Hit Top 200 Lists
iPhone iPad
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Ben Lorica: O’Reilly Research, 2011
And Not Many are Long-Term Hits
Top Paid Top Grossing Top Free
24% 24%
16%
21%
24%
14%
Hits That Spend 30+ Days on Top 200 Lists
iPhone iPad
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Ben Lorica: O’Reilly Research, 2011
Price Range Explanation
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price
Nu
mb
er
of
Ap
ps
25% Cheapest 25% Most Expensive Middle 50%
2 12
Media
n
3
Price Ranges for successful iPhone
Apps in Each Category
0 1 2 3 4 5 6 7 8 9
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(Range Bars Exclude 25% Cheapest & 25% Most Expensive Apps)
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Ben Lorica: O’Reilly Research, 2011
Price Ranges for successful iPad
Apps in Each Category
0 1 2 3 4 5 6 7 8 9
10
(Range Bars Exclude 25% Cheapest & 25% Most Expensive Apps)
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Ben Lorica: O’Reilly Research, 2011
Consolidate Free and Paid Apps
Through In-App Purchases
Virtual goods / freemium / subscriptions
Freemium model, e.g. allowing the user to unlock premium features from within the app
Key benefits of this: ◦ Demo to pay engagement model;
◦ Develop a single app;
◦ Market a single app (climb up charts with single app).
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Free Apps Are Well-Represented
Among Top-Grossing Lists
Top 200 Grossing
News Games Social Networking
15%
8%
25%
10%
14%
36%
16%
21%
% of Free Apps in Top-Grossing Category
iPhone iPad
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Ben Lorica: O’Reilly Research, 2011
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Join Us!
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Ben Zaaiman
www.mlab.co.za
ben@mlab.co.za
+27 83 448 4336
BZaaiman
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