How is it possible that so many smart phone apps are for free?

September 6, 2012 6:25 AM

I am relatively new to the smart phone world. But what I already learned is that incredibly many apps are for free. I wonder how that is possible. During the last month I have spent some time myself developing a financial app for Android - my preferred smart phone. The app of course could be useful not only for me but also for others. So I put it into the Google Play Store. Since I made some effort with bringing the thing to life I am not ready to give it away for free but expect getting a reasonable price paid. What I wonder is are people in general expecting apps to be free anyway? Are there other models how to finance the development of smart phone apps?
posted by matthiasw to computers & internet (27 answers total)

The free apps depend on ads that are displayed in the app.
posted by Thorzdad at 6:29 AM on September 6, 2012 [3 favorites]

Most free aps are supported by advertising. Or are sponsored by sites, like LinkedIn or American Airlines.

My Free Cell game has little ads running at the bottom of it.

Husbunny's soccer game was free, right up until he wanted a more sophisticated level, then he had to pay.

Ain't nothing free.
posted by Ruthless Bunny at 6:29 AM on September 6, 2012 [1 favorite]

Free is not free. When I download a free app, I expect to have advertising banners in the app. Kinda sucks. Kinda annoying. So, often, after trying an app, I will spring for the few bucks and upgrade to a non ad supported version.
posted by JohnnyGunn at 6:29 AM on September 6, 2012 [1 favorite]

Some apps have embedded ads (via Google adwords or similar) so app developers can get some amount of money for adviews.

Some developers have nice websites w/ "Donate" buttons, and hope that by offering high-quality free apps they'll get some donations.

Some apps have a function-limited free version and a paid version, and hope that giving away the free version will drum up more interest in the paid version.
posted by reptile at 6:29 AM on September 6, 2012 [1 favorite]

Often, apps are free to begin with to build up the "downloaded" stats and get good reviews, then later a price is introduced when the app is more likely to sell (having had good reviews and maybe being linked from other places on the web).

Other ways of doing are having a free, limited functionality version, and a paid, full-functionality version, and/or having the free one have ads and the paid version having no ads.
posted by EndsOfInvention at 6:30 AM on September 6, 2012 [1 favorite]

Well, there's a few reasons.

The most mercenary is that some apps (as others, on preview, have said) are ad-supported, so you don't pay for the app but you see ads and the developer makes money from them.

Some apps are free, but there's a paid-for app that does more stuff. The price that a few people pay subsidises the free app for everyone (thanks).

Sometimes a developer will work on a free app as a kind of portfolio to show to prospective employers.

And some people just do it for fun.
posted by The real Gareth Evans at 6:32 AM on September 6, 2012 [3 favorites]

I've got a couple free that are the electronic equivalent to swag. They're little proportional things meant to build costumer loyalty.
posted by Gygesringtone at 6:33 AM on September 6, 2012

Since I made some effort with bringing the thing to life I am not ready to give it away for free but expect getting a reasonable price paid.

Since I don't know who you are, what you app does, exactly, or how useful it is to me, asking me to pay my hard-earned money before even seeing it is a bit much to ask.

I expect there to be advertising, or I expect the app to do some basic, simple thing. If I decide that the app is really useful to me, then I will likely pay to get rid of the advertising or pay to enjoy the additional features, knowing how even the simple version was really well made. Because that is a best case scenario. In most cases, I will play with the app a couple of times and then stop using it, and that's not something I'm willing to pay for.
posted by deanc at 6:35 AM on September 6, 2012 [5 favorites]

Yeah, I have happily paid for several apps after trialling the ad-infested free version. If it works well, does what it says, and I find it useful, I will pay for it. But I can't know that for sure until I've tried it.
posted by Diag at 6:39 AM on September 6, 2012 [1 favorite]

Are there other models how to finance the development of smart phone apps?

- Advertising
- Free trial version with a paid full version
- In-app premium upgrades for more functionality
- Develop the basic functionality as a web service with an API, charge for access or premium-level access, make the app as an API client and give it away for free
- For games, there's an entire universe of options for monetization. Mostly it leads to really shitty games.

Also, piracy of IOS and Android apps is huge. Really, really huge. Anyone who is willing to root or jailbreak their phone and trust Russian/Chinese piracy repositories can have any app they like that's not just a frontend to a subscription-based service for free.
posted by The Master and Margarita Mix at 6:45 AM on September 6, 2012 [2 favorites]

A typical business model, which several people I know have successfully followed, is to release a free version of the app ("crippleware") and display ads in the free version to make a little money off them and "annoy" your users into upgrading. Then, once your users realize this is something worth $5-6, they'll pay for the upgrade.

Of course, the trick is finding a balance between free and paid features that lures in new users and converts them into paying customers. You don't want to make the free version too feature-bare, but you also don't want to give away so much that they don't care about upgrading to the full version.

Also, I think it's important to have a free version from a business standpoint so that you get a couple reviews on Android sites circulating and generating some buzz for your app. Make it easy for people to try it out.
posted by deathpanels at 6:48 AM on September 6, 2012 [1 favorite]

Oh, also, if you actually get very good at app developments and you're willing to hustle, you can get contract work developing apps on behalf of businesses or individuals. Most of them will be clueless (ala "Like Us On Facebook!"), most of the apps will be ridiculous clones of existing functionality or just a pointless conversion of their website into app form that would be better covered by hiring a web designer to make a real mobile site, and the market for that kind of nonsense will probably dry up completely in a few years. Until it does, though, it can be very lucrative nonsense.
posted by The Master and Margarita Mix at 6:50 AM on September 6, 2012

Two more models:

- Make a great app, give it away for free. Get millions of users. Get bought by a much bigger company that only cares about your brand or your user base, that will probably cripple your app in one way or another but who cares, you're rich!

- Your users are your product, your app is the device that you use to generate product, and your customers are people buying your users - advertisers, data-miners, funny crowd-source-intellectual-labor schemes, etc.

If you're using an app that's great, that has no advertising, and that's free - you're either the product or the app is going to go away/change for the worse some time soon.
posted by tempythethird at 6:59 AM on September 6, 2012 [1 favorite]

- Make a great app, give it away for free. Get millions of users. Get bought by a much bigger company that only cares about your brand or your user base, that will probably cripple your app in one way or another but who cares, you're rich!

A popular variant of this seems to go "Make a great app, give it away for free. Get millions of users. Develop it into a valuable service people are actually willing to money pay for. Scale it reasonably well. Get bought by a much bigger company like Microsoft or Amazon that's really only buying you out so they can put all the talented people you flocked to you when you were a cool startup on their payroll for a few years, and move them off your product and onto the one for which they need the headcount of experienced programmers who will still work for late-employee startup money and work startup hours."

It's like MLB's farm system, but for programmers instead of pitchers and first basemen.
posted by The Master and Margarita Mix at 7:07 AM on September 6, 2012 [2 favorites]

Another way that developers can monetize an app is through the collection and sale of user metrics. I have no idea how many apps are successful in turning a reasonable profit exclusively through this, but it is an option. Think about it: if your app can collect the user's identifying info, where they are using the app, things they are searching for, etc, and phone home with that, that info is valuable to someone.

It's also creepy, of course.
posted by adamrice at 7:25 AM on September 6, 2012

As a side note: free apps have been found to be some of the worst drains on battery life too. They have to connect to Google (or whomever) to get the adds. This takes power and shortens you working life. So battery life is another incentive to convert from free to paid users.
posted by bonehead at 7:29 AM on September 6, 2012 [2 favorites]

Thanks to you all. I have got a better idea now how app development can be financed and how to attract users for my app. I think I will offer a free version that is somehow scaled down. That will take some time of course. Am I allowed to place a link to my web site so people can find out what my app is about? I am cautious because I am new to metafilter and do not want to mess with their policies.
posted by matthiasw at 7:39 AM on September 6, 2012

The App Store for iPhone provides charts of best sellers (free), best sellers (paid) and best sellers (grossing). This reveals that over the past year or so, the market has changed, and the highest grossing apps are all free. In app purchase is where the money is, at least for now, and at least in games. See The fall of Angry Birds.
posted by caek at 7:40 AM on September 6, 2012

Which is to say, on iOS at least, neither "traditional advertising" nor upsell from free to "pro" versions of is the reason why free apps are so profitable for developers. It's in-app purchase of extra features.
posted by caek at 7:43 AM on September 6, 2012

Advertising.
posted by Kololo at 7:47 AM on September 6, 2012

I don't buy an app unless:

- it gets great reviews, and I cannot find a free app with the same functionality (iSmoothRun, Car Minder Plus)

- or it has a free version, either scaled down or with ads, that I've tried and decided to upgrade (examples: Week Cal, Farenheit, Strip, P Tracker)

The latter makes me much more likely to buy.
posted by Kriesa at 8:06 AM on September 6, 2012

Am I allowed to place a link to my web site so people can find out what my app is about? I am cautious because I am new to metafilter and do not want to mess with their policies.

You're allowed to post links to your website on your profile page. And when you're done with the app you can post it to Projects!

But don't post it in this thread or anywhere else really if your intention is to get eyeballs (FAQ)
posted by bluefly at 8:18 AM on September 6, 2012 [2 favorites]

matthiasw, totally okay to put a link to your app in your profile. Very much not okay to put a link to it in this thread.
posted by jessamyn at 8:18 AM on September 6, 2012

It also greatly depends on which market you are trying to break into. According to Marco Arment (built Instapaper and has a weekly podcast on the 5by5 network, definitely knows his stuff) iOS users are much more open to the idea of paying for apps than Android users.

Personally, as an iOS user I'm scared to even calculate what i've spent on apps, mostly in $0.99 increments...
posted by cgg at 8:37 AM on September 6, 2012

I've avoided buying any android applications thus far, mostly even avoided running closed source applications. I haven't installed any ad supported applications either afaik, although maybe some ad blocker stops them, I uninstalled one application after it complained about my ad blocker. You quickly find free applications for critical tools like VoIP, IM, Editors, Terminals, Crypto, VPN, rooting, document readers, etc. I've zero use for silly stuff like stock price tickers and no time for games.
posted by jeffburdges at 8:42 AM on September 6, 2012

Most free applications have some other way of making money: ads, in-app purchasing, premium upgrades. On the other hand, there are also a lot of apps that are just something the author wanted for themselves and then uploaded to the app store.
posted by ckape at 11:26 AM on September 6, 2012

Could you partner with a financial magazine or website or bank?
posted by LarryC at 1:28 PM on September 6, 2012