Apps require an ecosystem to thrive. One major challenging issue for app developers in India is to transform a good business idea into a commercial success. The current rate is not encouraging. Majority of the developers try to optimize their odds of becoming profitable for instance by preferring the platform with the maximum installed user base. Several other factors driving the OS preferences are familiarity with the development environment and the cost and expenditure of development. On the whole, application development is not considered to be a remunerative business opportunity any more. Twenty two per cent of respondents who answered the question on preference of revenue model and strategies indicated that they did not have any specific revenue generation business plan. While some developers are engaged in assignments based on contractual development, there are lots of developers who self-finance their project and do not actively market or promote/advertise their app. The business of mobile app development in the country seems to be at a level in which it could be characterised as one usually based on a ‘hit and trial’ philosophy
Self-financing is a very common practice in the app industry. Only 10 and 20 developers go to banks or venture capitalists for financing. Funding an app developer is not an investor’s primary preference. Identifying and forecasting the market failure and the utility of apps, the Department of Electronics and IT and Department of Telecommunication have both instituted funds to drive mobile technology ventures and innovative app development in India. One can argue on the efficacy and effectiveness of the use of limited public resources for app development, but not the fact that app development in India requires a power boost. The app industry is still in its initial stages which is very young and ‘unorganized’ and is largely dependent on own and informal sources for financing.
Majority of the apps in India are mostly distributed either by app stores or on the developer’s websites. Most 70 per cent of the end users use app stores. In very rare cases developers email their app to a target group of users. Developers spend more than 70 per cent of their development cost on marketing.
Other avenues for marketing consist of:
- social networking websites
- promotions in magazines and
- Cross promoting new apps on an existing app.
Most widely popular revenue generation models include approaches like:
- In-app purchasing
- Freemium and
- Pay per download.