Goodbye, $.99 iPhone apps!

Apps with a cheap, one-time cost will be replaced by apps that bring in advertising dollars or drive recurring revenue based on usage or a subscription fee. This is just one of many findings released today from a survey of 2,235 mobile app developers, jointly conducted by app development platform vendor Appcelerator and market researcher IDC. According to the report, developers are shifting away from free brand affinity apps and becoming less reliant on $.99 app sales. In fact, mobile app developers are weighing seven business models, the most prevalent still being app store sales with 59 percent of respondents using this model. Other models include advertising (43 percent), in-app purchase (42 percent), brand loyalty and engagement (34 percent), mobile commerce (26 percent), subscription (26 percent), and coupons and loyalty programs (10 percent).

So far, the fastest growing business model is mobile commerce. In a similar survey last year, only 14 percent of mobile app developers had mobile commerce as part of their business model mix. Today, one out of four have mobile commerce, a growth of 86 percent. Apps are also maturing and becoming more complex, evolving from simple content-based apps to apps that make use of location, social and cloud services to transactional apps that tap the power of mobile commerce, according to the study.

The study concludes, that as the customer experience evolves, so does application sophistication, customer expectations, business transformation opportunities and the underlying business models. On the tablet front, the survey found that Androids and, to a lesser degree, the BlackBerry PlayBook are gaining mindshare among developers at a faster rate than the market-making iPad. Seventy-four percent of respondents said they are "very interested" in developing for Android tablets, up from 62 percent last year. Twenty-eight percent are eyeing the BlackBerry PlayBook, up from 16 percent last year. The iPad leads with 87 percent, only a 3 percent increase from last year. Web OS tablet interest remained flat.

All tallied, this year mobile app developers plan to triple their app development efforts, according to the study. The average app developer will build for four different devices, a two-fold increase from the year prior. The top device continues to be the iPhone, with 92 percent of mobile app developers "very interested" in developing for the iconic phone. The iPhone is followed closely by the Android phone (87 percent), iPad (87 percent) and Android tablet (74 percent). After the big four, the drop off is severe with the BlackBerry phone (38 percent), Windows Phone 7 (36 percent) and BlackBerry PlayBook (28 percent).


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