The mobile application development industry has undergone sharp changes in the way app development projects are being priced. Almost every app development company in the world is offering its services at affordable rates. However, the growing demand for feature-rich mobile apps has created challenges concerning the app development cost. These days, app developers are building products based on two pricing models, paid and free apps.
In paid app development, the customer pays the app development cost upfront. In free app development, the app is pre-built by the developer with basic features. However, the developer makes money after app deployment, through advertisements, in-app purchases, and premium/freemium subscriptions.
Here, let’s have a close look at the benefits and drawbacks of these two pricing models for app development companies and customers.
Paid Application Development Over Free App – Pros & Cons
The paid app market is not as active as it was a few years ago. About 30% of the apps in the Apple App Store and Google Play Store, require upfront payments. In the market, over 350,000 paid apps are available till the end of the year 2020. One of the biggest factors causing the downtrend of paid apps is the rise of freemium pricing.
Pros of Paid App Development
- Paid apps have high-end security. The app development company takes great care in making the apps safe for users.
- Paid apps generate direct cash flow for app developers. The app development cost recouped within months of deployment.
- Building a paid app is more rewarding as the app development company generates significant revenues even with fewer downloads.
- The success of paid apps provides ample incentive to launch newer versions of the app.
- With the rise of freemium apps, paid apps have less competition in the app marketplace.
- Paid app development can also support special offers such as being free for a limited time. Such tactics are great for marketing the app product.
Cons of Paid Apps
- Paid apps do not garner significant downloads. Even thousands of the most successful paid app gets downloaded. Getting a million downloads for a paid app is considered extraordinary.
- Most paid apps target only the high-spending smartphone users. It does not offer payment flexibility to become more affordable for all users.
- Most of the revenue generated from paid apps comes within the first couple of months. If the paid app is unable to garner significant downloads after its launch, it can fade away and remain shelved on the app stores for years
Free Application Development – Pros & Cons
Free app development is in high demand for the past few years. The benefits of the freemium business model are helping every app development company around the world. The app development cost of free apps is not compromised on the pretext of cost savings. Instead, free apps are now packed with intuitive ads, extra content, and premium services. Over 92% of iOS apps are free and 85% of Android apps are downloaded at zero charges.
Pros of Free App Development
- Free app development benefits the most from high downloads. Compared to paid apps, the downloads of free apps are 10x higher.
- The benefit of a free pricing model removes all barriers between the app and the user. Most people won’t hesitate to try a free app.
- Free apps can develop brand loyalty and create a dedicated user base.
- The freemium model is easy to follow and makes the app affordable for all users.
- A lot of free apps can generate long-term revenues for the app development company.
- Brands pre-sponsor free apps through advertising contracts and combo deals.
Cons of Free Apps
- The Freemium model, however, has not always been that beneficial to app development companies. Recouping the app development cost becomes a challenge for free apps.
- Despite the in-app purchases, it is difficult to generate a consistent flow of revenues over time.
- An app development company does not risk upgrading free apps that did not make enough money.
- Free apps have worse user engagement than paid apps. Users do not give any commitment to the free app. They can uninstall them a few weeks after the downloads
The debate on “paid vs free” app development continues to change the dynamics of the mobile industry. Some free apps get the worst reviews while some paid apps do not make even a hundred downloads. The only way to get the best out of these apps is to find a reliable app development company. An app developer with years of experience can build a free app with high engagement qualities and exciting features. It can also create a paid app packed with exclusive features that are worth its price.