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Choosing a business model

The App Store empowers you to scale your app distribution worldwide using a variety of business models. The right business model for your app balances your goals with your target market’s expectations. Choosing your business model before developing your app can inform your app design decisions for a cohesive user experience.

With free models, users don’t pay to download or use your app. Removing the barrier of price increases the likelihood that users in your target market will download and try your app, which can help increase awareness and expand your user base. If you’re looking to grow your brand or attract a large user base, consider offering your app for free.

Free without monetization. Your app doesn’t offer in-app purchases or the ability to buy physical goods or services within the app, and doesn’t display advertisements. You don’t earn any revenue from your app.

Free with physical goods and services. Users can purchase physical goods and services — such as clothing or food — within your app or order rides from transportation services. You earn revenue from these sales.

Free with display advertising. Display advertisements are part of the app experience and you earn revenue when presenting them. Make sure that all display advertisements in your app are appropriate and relevant to your target market, as low-quality, obtrusive, or inappropriate advertising reduces engagement and retention.

Your app and any third-party SDKs you use to help target display advertising or measure advertising efficacy need to follow the Data Use and Sharing and the Advertising sections of the App Store Review Guidelines.

Reader. Users purchase or subscribe to content — such as magazines, newspapers, books, audio, music, or video — outside of your app and enjoy access to that content within your app. You generate revenue outside of the app. For more information, see the “Reader” Apps section of the App Store Review Guidelines.

With freemium models, users pay nothing to download your app and are offered optional in-app purchases for premium features, additional content, subscriptions, or digital goods. Freemium apps are accessible to all users, regardless of whether or not they choose to spend, and offer the option to pay to enhance or customize the experience. You earn revenue from the sales of in-app purchases within your app. Successful freemium apps operate as services that are continually updated to attract and retain users. You can offer multiple types of in-app purchases, including subscriptions.

In-app purchase types

Consumable. Users can purchase different types of consumables, such as lives or gems in a game, to further their progress through an app. Consumable in-app purchases are depleted as they’re used, and can be purchased again.

Non-consumable. Users can purchase non-consumable, premium features within an app. Non-consumables are purchased once and do not expire, such as additional filters in a photo app. Apple can host content associated with your non-consumable in-app purchases.

Auto-renewable subscriptions. Users can purchase access to services or periodically updated content, such as monthly access to cloud storage or a weekly subscription to a magazine. Users are charged on a recurring basis until they decide to cancel. Learn more about subscriptions.

Non-renewing subscriptions. Users can purchase access to services or content for a limited duration, such as a season pass to streaming content. This type of subscription does not renew automatically, so users need to renew each time.

If you wish, you can allow users to access content or services across multiple Apple devices, as well as other platforms. If you offer any multiplatform functionality, be sure any purchasable items or services outside of the app are also available as in-app purchases within your app. For more information, see the Multiplatform Services section of the App Store Review Guidelines.

Learn about different freemium experiences

In the paid model, users pay once to download your app and use all of its functionality. There are no additional charges or in-app purchases. You earn revenue from the sales of your app. This model resonates with users who prefer to pay once to get the full experience. Because the cost to download might make users consider the app’s value more carefully, successful paid apps are often positioned as premium experiences through outstanding design, functionality, and marketing.

In this combination of the paid and freemium models, users pay to download your app and have the option to buy additional features, content, or services through in-app purchases if they want to engage more deeply. It offers the possibility of lowering the app’s download price while using in-app purchases for ongoing monetization. Successful paymium apps offer premium design, functionality, and content, as well as advanced features intended to complement the experience.

As with paid apps, the cost to download might make users consider the app’s value more carefully. Set expectations about what users get when they pay up front and what they’ll get if they purchase optional enhancements. Keep in mind that creating in-app purchases for features that are required to use the app can cause a negative experience and may affect your sales and retention.

App Store Small Business Program

The App Store Small Business Program is designed to accelerate innovation and help propel your small business forward with the next generation of groundbreaking apps on the App Store. It features a reduced commission rate of 15% on paid apps and in-app purchases, so you can invest more resources into your business to continue building quality apps that customers love.

Learn about the program

How to Choose the Right Business Model for Your App

Understanding the different app business models.

Before we tell you how to choose the right business model for your app, we would first like to go over the different business and revenue models that modern-day apps go for. That way, when it comes to choosing the right one for you, you will be aware of all the app revenue models available to you.

Brand Model

This model is generally used by large and established companies, which are usually happy to make the app free for users. Depending on the goal of the app, it can either be free without monetisation, with the goal of boosting the company’s brand image and reputation, or it can be used to sell goods and services. Aside from that, offering the app at no cost makes it more appealing for new users to download and try.

Freemium Model

The Free/Premium model, offers a basic version of the app for free while providing further additional features and extras, or functionality through a premium version that app users can purchase. The goal of this model is to attract more new users with the free version, a percentage of which can then be converted into revenue from paying customers.

(source: SubscriptionFlow )

This model is particularly effective for freemium apps that offer ongoing value, such as productivity tools or content platforms. If that’s the case, then you should consider which features to keep free. Consumers might be put off if they have to pay for the most basic ones. Advanced features are more likely to be valued by the right audience and a free trial might make app users more considerate to them.

Research has shown that the free trial model is 20% to 30% more successful in converting consumers into paying customers than the free model, which is free for an indefinite period of time. This is most likely due to the users valuing the complete functionality of the paid products that are on the market.

Subscription Model

The Subscription app business model can be either auto-renewable or non-renewable. It involves charging users a recurring fee (annually, monthly, or weekly) to access the app’s content or services. Usually, this business model would be most suitable for mobile apps that provide continuous and consistent work with selected, high-quality content and premium features.

(source: AppsFlyer )

Ongoing income from successful paid apps is almost certain if you have a well-thought-out project, resources, and features. With this paid app business model, however, consumers are being charged on the app regularly, until they cancel it themselves.

The non-renewable subscriptions are charged only once and they can include all kinds of streaming content, services, and passes. Depending on the market you can also decide if you want to grant access to multiple devices when the service is purchased.

If you decide to use the subscription business model, check out our definitive step-by-step playbook on building & scaling subscription apps. Get your copy here

In-App Purchases

In-app purchases are associated with selling virtual goods, extra lives, and power-ups for games, or other digital items within free apps. Gaming apps often utilise this model, creating an enticing user experience that encourages users to make small consumable app purchases, for in-game enhancements and progress.

(source: Adjust )

Another selection of apps that choose this business model are ones where customers can purchase non-consumable or expiring goods. For example, users pay only when they are using photo editing services or filters that once purchased do not run out or expire.

Pay-per-Download Model

In the Pay-per-Download model, app developers say users are paying a one-time fee to download the app from an app store. This model is less common nowadays, but can still be effective for paid apps with a strong value proposition or unique features.

While the paid downloads app business model is outdated compared to the surge of free apps with in-app purchases or advertisements, the paid download app revenue model is still being used. It tends to be chosen from apps that can provide particular rare tools and distinctive content.

The downside is that it could be challenging to convince users to pay for something that already has numerous free alternatives out on the market. If you do however convince customers to select you, you should be aware that they would probably have higher expectations and regular improvements would be crucial.

Ad-based Model

Apps using the Ad-based model work by displaying advertisements to users. You can generate revenue by presenting numerous types of ad formats, such as banner ads, interstitial ads, rewarded videos, text ads, and others. 

(source: MobileAction )

Careful integration is essential to maintain a positive user experience while benefiting. Most often the usage of the app is entirely free, but the assets come through the presentation of advertisements inside the application.

Affiliate Marketing Model

The Affiliate Marketing business model for apps promotes other products or services, and when users make a purchase through the app’s referral links, the app earns a commission. You would be collaborating with other businesses or platforms. This model works well for apps in niche markets with engaged audiences.

In this case, the audience for your mobile app would be very specific and you need to be aware that the content should be very explicit, targeting only customers who are genuinely intrigued by particular products. Providing information to businesses and companies seeking such content also increases earnings.

Data Monetisation Model

Apps choosing the data monetisation model should be aware that this model requires transparency towards data above all to maintain the user’s trust. This app business model provides access to the applications for free while you are gaining revenue by either supplying source data to third parties or using it for your own benefit. You can use this monetization model also to gather valuable information for personal advantage which can lead to growing and improving your business.

You can collect data from users in numerous ways. Letting the consumers of the app complete forms and surveys is a great choice. They can contain details such as email or name, or they could be questions about preferences. You can also collect location data and many more with UDIDs (unique device identifiers).

Companies are eager for data, so if you decide to use this business model to sell information to third parties, you can easily generate revenue and increase your assets. Data helps businesses reduce unnecessary spending and create essential and needed products. It can also help them to work on more efficient strategies depending on the niche they are in.

You can sell your data by searching and reaching out to research companies, advertising companies, and others. Another way you can sell all the data that you collected is to sell it to the government, or even sell it by hiring a selling company, or by joining a data marketplace.

Crowdfunding Model

This business model for apps is highly unpredictable as it relies only on donations gained revenue. Don’t give up on it yet, because it can be a viable way to start a new business. 

It has become very popular in the recent years and works as people voluntarily contribute, by supporting the app’s maintenance and development. It primarily focuses on users deeply passionate about a specific niche. In most cases, the donations are either given as an option for specific amounts or the donors can pick the desired donation amount.

Sponsorship Model

In this model, the app functions as a platform enabling advertisers to connect with their intended audience using different forms of promotional content. Access to the app is granted for free and the assets are being monetised by sponsors, who in return increase their brands’ visibility further. The content can again include sponsored posts, videos, banner ads, and others. 

The best way for this app business model to work is by displaying selected products and services that would intrigue the app’s users. It is important to keep the advertising relevant unless you want to risk having annoyed customers. Excessive advertisements can also become overwhelming and lead to a negative user experience.

To ensure the consumer’s satisfaction and engagement you would be required to find a balance between the sponsored content and the app’s core features. The advantage of this app business model is that the users can enjoy the application without any financial commitment, which usually attracts more users.

SMS Marketing Model

The SMS Marketing model includes the use of a mobile app to optimise and facilitate communications between businesses and their customers. This model has proven to be effective by engaging with the user, promoting products and services through text messages, and delivering timely information. 

The recipient subscribes voluntarily to particular brands and businesses, enabling them to send text messages. The key factor to developing this app business model is the ability to deliver worthy content efficiently to the user. 

The app maintains a database of the preferences, activity, and other information of the subscribers, which helps to personalise all the features and content that is being delivered. Making sure that you stick to the SMS marketing regulations and gain the user’s consent to avoid any legal problems is absolutely crucial.

Email Marketing Model

The Email Marketing business app model involves building and utilising an application, intending to strengthen email communication and optimise commercial-related tasks via mobile devices. This model offers users more convenient and efficient methods to handle their communication and work tasks while on the move by the long-established presence of emails.

To monetise your app via email marketing proficiently there are a number of essential elements that you need to think through. That would include the integration of tools such as task management and calendars. You would also need to carefully think of a plan on how to present the application in a way that keeps your audience engaged.

The advantage of this app business model is that users have access to the emails anytime and once the productivity and management of the emails are merged the consumers won’t have to be switching between different apps.

You should keep in mind that this model would be challenging, as the email app market is pretty competitive and there are various established platforms that are providing valuable content to their users. That said it can be difficult to convince customers to switch to your new app once they are used to already familiar email applications.

Licensing Model

The licensing business app model stands out with various benefits for both the developer of the app and the different companies and organisations. 

This model includes granting rights to other businesses to use, adapt, personalise, and even make over the app so that it meets their specific requirements. This often involves handling the license for a fee or a percentage of the the app revenue made. The agreements between the parties can sometimes be complicated and might include negotiations over the terms and conditions, the prices, and more.

A high standard and quality must be maintained at all times by the developers to ensure the continuous growth and progress of the application. Unfortunately, sometimes it can be challenging to find a balance while you are trying to meet all the required customisation, additional features, and preferences.

To succeed with this app business model you would need to come up with a very flexible project for most of the functions to allow enterprises smooth and straightforward integration to the application. Clear and transparent agreements are a key factor here for smooth relationships between businesses. Commitment with careful planning, systematic support, and regular requests for feedback you can become successful and preferred within the market.

How to Choose the Right Business Model

Before you choose the right business model for your app, there are several things that you should consider. Some of them include:

Your Target Audience

You need to understand your target audience’s preferences and behaviours. A gaming app’s audience might respond well to in-app purchases, while a productivity app’s users would prefer a subscription-based model.

If you decide to use a paid app model or a free app business model it’s crucial to focus on user satisfaction, engagement, and delivering value. Whichever app business model you decide on you would need to carefully plan how to understand them and continue to adapt your approach based on user feedback to success.

Understand Your App’s Value Proposition

Align the chosen business model with your app’s value proposition. If your app offers ongoing utility or exclusive content, a subscription model could be appropriate. If it’s a one-time-use app, consider a pay-per-download model.

Competitive Landscape

The competitive landscape covers the fast-paced environment approaching the market with various strategies and well-thought-out projects. Researching your competitors and the business models they use would be required. Boost your global mobile app revenues by offering a unique value under a business model that stands out in the market.

User Engagement

Consider how often users will engage with your app. Apps with higher engagement rates might benefit from in-app purchases, while those used less frequently could thrive with a paid subscription model as that keeps users attached to mobile apps.

Long-Term Viability

Evaluate the sustainability of your chosen model over time. Would it provide consistent revenue, or will it become outdated as the customers’ preferences change? Once you have an answer to that question, figure out if the business model you have chosen is the right one for you.

Selecting the right business model for your app is of crucial importance for its long-term success. Each model comes with its challenges and strengths, so you should take the time to explore and analyse your app’s goals, target audience, and market trends before settling on a business model. By placing these factors in line, you will be well-equipped to choose a business model that generates revenue and enhances the overall user experience.

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The Best Mobile App Development Business Models

Business-Models

As an app developer, it’s essential to understand the various business models available to make the most money from your development services. This article outlines the best app business models for you to consider.

Freemium Model

The freemium app business model is one where you offer a free app with in-app purchases. This is a great way to monetize your app as it allows users to try it out before they commit to paying for it. However, to make this model work, you must ensure that your app offers enough value to persuade users to make in-app purchases.

An example of a freemium app is Supercell’s Clash of Clans. The app is free to download and play, but users can make in-app purchases for extra resources and upgrades.

Advertisement Model

The advertisement app business model is one where you display ads in your app. This is a great way to monetize your app if you have a large number of users, as you can generate a significant amount of revenue from advertising. However, it’s essential that ads are not intrusive and do not negatively impact the user experience.

An example of an app that uses the advertisement model is Facebook. The app displays ads in the News Feed, such as carousel, image, or video ads.

Sponsorship Model

The sponsorship app business model is one where you find a sponsor for your app. This is a great way to monetize your app if you have a large number of users, as you will be able to generate a significant amount of revenue from the sponsor. However, ensuring the sponsor is relevant to your app and that their branding is not intrusive is vital.

An example of an app that uses the sponsorship model is Runtastic. The app is sponsored by Adidas and users can see Adidas branding throughout the app.

Subscription Model

The subscription app business model is one where you charge users a monthly or annual fee to use your app. This is a great way to monetize your app, allowing you to generate recurring revenue from your users. However, in order to make this model work, you need to ensure that your app offers enough value to persuade users to subscribe.

An example of a subscription app is Netflix. Users can subscribe to the app for a monthly fee to gain access to all of the app’s content.

Affiliate Marketing Model

The affiliate marketing app business model is one where you promote products or services in your app and earn a commission on sales. This is a great way to monetize your app as it allows you to generate revenue from your app without charging users anything. However, to make this model work, you need to ensure that you are promoting products or services that are relevant to your app.

An example of an app that uses the affiliate marketing model is Amazon. The app promotes products on behalf of Amazon and users can purchase these products through the app.

e-Commerce Model

The e-commerce app business model is one where you sell products or services through your app. This is a great way to monetize your app as it allows you to generate revenue from your app without charging users anything. However, to make this model work, you need to ensure that you are selling products or services that are relevant to your app.

An example of an app that uses the e-commerce model is Etsy. Etsy allows users to buy and sell handmade products.

Paid App Model

The paid app business model is one where you charge users a one-time fee to download and use your app. This is a great way to monetize your app as it allows you to generate significant revenue from your users. However, to make this model work, you need to ensure that your app offers enough value to persuade users to pay for it.

An example of a paid app is Super Mario Run. The app costs $9.99 to download, and users can play the app without any in-app purchases.

Commission Model

The commissioned app business model is one where you create an app for a client who pays for your work. This is a great way to monetize your development skills, allowing you to generate revenue from your app development services. To make this model work, you must have the skills and experience to develop high-quality apps.

Selling User Data Model

The selling user data app business model is one where you sell your app’s user data to third parties. This is a great way to monetize your app as it allows you to generate revenue from your app without charging users anything. In order to make this model work, you need to ensure that your app has a large number of users and that you have the permission of your users to sell their data.

An example of an app that uses the selling user data model is Facebook. The app sells user data to third parties for advertising purposes.

Select the Right Business Model for Your App

There are many different app business models available to app developers. The best way to monetize your app depends on the type of app you have developed and the needs of your users. Consider all of the options available to you before deciding on the best way to monetize your app.

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Maximizing Profitability: 7 Successful Business Models for Mobile Apps

In today’s fast-paced digital age, mobile applications have become an integral part of our daily lives. With millions of apps available on app stores, it is no surprise that the mobile app industry is growing rapidly. However, with increasing competition, it has become crucial for app developers to come up with innovative and profitable business models to stand out from the crowd.

Whether you’re a seasoned app developer or just starting, choosing the right business model is essential for the success of your app. The right business model not only helps you generate revenue but also plays a vital role in customer acquisition, user retention, and building a loyal customer base.

In this article, we will explore 10 of the most successful and profitable business models for mobile apps. By understanding the benefits and drawbacks of each model, you will be able to choose the one that best fits your app and maximize your revenue potential. So, let’s dive in and explore the world of app business models!

1- Subscription

If you haven’t heard the term yet, Software-as-a-Service (SaaS) is a powerful business model that allows you to sell software (your app) for a recurring fee—either monthly or annually.

The great thing about the SaaS model is that it’s very flexible and can be customized to whatever you want to include as part of your “packages” or “tiers.”

upgrade your subscription saas business models mobile app

Based on your target audience, the more advanced features can be included as part of certain tiers, whereas in other cases it makes sense to include the whole package in just one monthly tier and increase the price as customers add team members or custom metrics to their plan.

While definitely powerful, the SaaS model is hard to pull off in the sense that it would normally require you to have programming skills. That would have been the case 3-4 years ago.

However, you can now get a mobile app with an integrated SaaS business model without touching a single line of code thanks to strong growth in low-code technologies.

Pros of subscription model

  • Can generate consistent and predictable revenue through recurring fees.
  • Encourages long-term user engagement and loyalty.
  • Can offer access to exclusive content or features.

Cons of subscription model

  • Users may be hesitant to commit to recurring fees for an app.
  • Subscription fatigue can lead users to cancel or stop renewing their subscription.
  • Can require a significant amount of resources to continuously produce and update premium content.

2- Freemium

Gating features behind a paywall is a favorite of many fast-paced online businesses, especially if those features are only needed for a brief period of time before the user churns.

mobile app business models gated features example

Examples for apps that would benefit the most from this are logo makers, self-made design services, file conversion apps, and other “deliverable-style” software.

Here’s a practical scenario:

  • The user needs to create a Gif on their phone
  • They are unable to do so with the built-in features
  • Because of that – they go and look for an app that can help them achieve their desired outcome (creating a Gif as quickly and easily as possible)
  • When looking for an app – they find something for free that gets the job done
  • They download it and proceed to follow the steps to make a Gif
  • Once they are happy with the results – the app gives them the option to download (or “export”) the Gif – but with a big caveat displayed as 2 options »
  • You download for free and get the app logo displayed on top of the Gif as a watermark to spread the word when it inevitably gets shared online
  • You pay X once or on a monthly basis to get either 1 or as many downloads as you want free of the app’s logo shown on top of your creation

This is a very typical scenario and, although it can be annoying, some online services are able to pull this off rather effectively. The important thing here is to offer the right price.

If a user does all of that work only to see themselves paywalled with a $34.99 yearly subscription, they’re not going to go for it and they will talk badly about your app.

If a user does all of that work only to see themselves paywalled with a $34.99 yearly subscription, they’re not going to go for it.

But if you give them either the option to download 1 Gif for $1.99 or subscribe for as little as $3.99/mo, they might well consider your offer. It sits within “impulse-buy” range.

Of course, this is a business model that requires volume to work. That’s why the first option is to add a logo as a watermark so that more people get to know about the app quickly.

Pros of freemium model

  • Can attract a large user base with a free version of the app.
  • Users can test out the app before committing to paying for premium features.
  • Can generate steady revenue from users who choose to upgrade to premium features.

Cons of freemium model

  • Developing and maintaining multiple versions of the app can be time-consuming and costly.
  • Users may be deterred from paying for premium features if the free version is sufficient.
  • Can be difficult to find the right balance between free and premium features to incentivize upgrades.

3- In-App Purchases

This is the standard in mobile apps; you download one for free, whether that be a game, a productivity app, or a business solution, and you pay directly from within the interface.

For business purposes, this isn’t as powerful as something like a game since it doesn’t guarantee recurring revenue, although you can create in-app subscriptions as well.

fiverr business models app example for purchasing productized services

In-app purchases work well for:

  • eCommerce apps selling directly to an end-user
  • Consumer mobile apps selling digital goods
  • Productized service apps like Fiverr

If you want to sell to other businesses with this model in mind, you’re either looking to create an eCommerce shop that sells products in bulk or offer “productized” services.

A productized service is a service limited in scope by a predefined “package” that you offer for $X either as a one-time fee or on a recurring basis. It’s not super easy to pull off because you need to be able to personalize while staying broad enough to fit a specific target audience.

Pros of In-App Purchases model

  • Can generate significant revenue from users who are willing to pay for virtual goods.
  • Can incentivize users to engage with the app more frequently to earn or purchase virtual goods.
  • Can create a sense of exclusivity and reward for users who make in-app purchases.

Cons of In-App Purchases model

  • Users may be deterred from making in-app purchases if they perceive the value to be low.
  • In-app purchases can negatively impact the user experience if they are required for basic app functionality.
  • Can create an unfair advantage for users who are willing to spend money on virtual goods.

4- Paid Apps

Paying for an app upfront is definitely old school but it may still work if you’re looking to sell support licenses the way software providers have done for decades.

affinity designed mobile app business models license basis

Nothing wrong with that, it just won’t have the same effect on the market as selling access to a set of tools for a lower price and retain the customer for years instead of a one-time purchase and then you don’t really know what they are doing with your product anymore.

Paying for an app upfront works well when:

  • You only offer a yearly option with support and new updates not included if the customer doesn’t renew their purchase, making their version usable but obsolete.
  • Your app plugs into another platform or system as a sort of “plugin,” meaning that customers can quickly buy and test it without much of the risk.
  • The target market is large enough, allowing you to niche down in a specific offering that will always be available upfront and that is easy to pay for.

We don’t recommend paid apps if you’re looking to sell a business process like inventory management or customer relationship management. 

SaaS is best for those.

Pros of Paid apps model

  • Revenue is generated upfront with each app download.
  • No ads or in-app purchases can create a more streamlined user experience.
  • Can help establish credibility and value for the app.

Cons of Paid apps model

  • Users may be hesitant to pay for an app they have not tried.
  • Paid apps can be less attractive to users who prefer free alternatives.
  • Revenue is limited to the initial purchase price and may not be consistent.

5- In-App Advertising

Ads are also one of the more traditional ways to monetize an app but they don’t fit well with what customers expect from a modern mobile app today. Lazily spreading ads throughout your app in hopes that someone will click on them and generate you a tiny bit of money is not worth it.

Mobile ads work well for:

  • Reading experiences
  • Certain platforms

You don’t want to plaster a community app with ads; it’s the exact opposite experience of what a creator would want for their members. Instead, you should focus on creating rich media experiences that are augmented with relevant ads as part of the content itself.

Pros of In-App Advertising model

  • Can generate consistent revenue through ads displayed in the app.
  • No cost to the user, so it can attract a large user base.
  • Can be an effective way to promote other products or services within the app.

Cons of In-App Advertising model

  • Users may find ads intrusive and negatively impact the user experience.
  • Revenue may be unstable and depend on factors such as ad quality and user engagement.
  • Can be difficult to strike a balance between ad revenue and user experience.

6- Sponsorship

Sponsorships are a good business model if you’re building a media experience and can work on a certain creator platform type of apps. They’re certainly not the most straightforward to design or build as they require a network of deep-pocketed companies ready to pay for a mention.

I’m putting both this and affiliate marketing at the bottom of the list because—while interesting—they are quite hard to pull off and require a lot of time building a personal or business network without any guarantee that you’ll make a profit one day. Not easy!

Pros of sponsorship model

  • Can generate a significant amount of revenue from a single partnership.
  • Can increase brand awareness and credibility for the app.
  • Can provide opportunities for cross-promotion and collaboration with partner brands.

Cons of sponsorship model

  • Finding the right partner can be challenging and time-consuming.
  • The partnership may not align with the values or interests of the app’s user base.
  • Sponsorship deals may not be consistent and may not provide a stable revenue stream.

7- Affiliate Marketing

It’s not typical to have mobile apps making heavy use of affiliate marketing practices; this is more popular in the blogging scene as the medium makes it easy to share information related to certain products and services. However, some apps like publishing apps may well have integrated browsing experiences which can turn affiliate links into direct purchases.

Pros of affiliate marketing

  • Can generate revenue without the need for in-app purchases or ads.
  • Can be a low-risk way to test out different revenue streams and partnerships.
  • Can provide users with relevant and useful product recommendations.

Cons of affiliate marketing

  • Revenue is dependent on user purchases and can be unpredictable.
  • Over-promotion of products or services can negatively impact the user experience.
  • May require significant effort to identify and establish profitable partnerships.

What Business Model Will You Choose for Your App?

hire a pro to build the app in 21 days mvp launch checklist 8

Depending on whether you are selling to other businesses or to consumers, we’ve highlighted some of the most interesting business models to consider when building a mobile app.

My personal recommendation is to focus on business solutions as they are a lot less competitive than consumer ones and require less volume to become profitable.

LowCode Agency no-code agency helps with the tricky technical parts to implement in your app so that you can focus on the business model, grow the company, and make the profits.

See how much yours would cost »

Frequently asked questions

Depending on your target audience, some examples of business models are using monthly subscriptions to give access to the entire experience (or parts of it), gating features behind paywalls—such as additional user seats—or using in-app purchases and advertising.

To design a business model that’s profitable for your app, you need to consider your target audiences’ needs and wants closely. Selling to a business user will not be the same as selling to a consumer—they are more likely to want peace of mind and return on investment.

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Jesus is the founder of Low Code Agency: a low-code development agency that allows small business owners to get their mobile and web apps done fast and cost-effectively while maintaining quality.

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A Guide to Mobile App Business Models and Monetization | SF AppWorks

We love building simple, useful apps. But   without a monetization strategy , we   can’t   drive traffic   through advertisement. Consumer apps are essentially microbusinesses - each needs its own revenue stream and business model. Here are the top mobile app business models used in consumer apps, with examples of each. 

1. Freemium (Zoom)

The basic mobile app business model concept of freemium is to   offer limited functionality   to hook users, then   charge them for expanded functionality   once they’re hooked. The art is in determining when to charge people.

Zoom , for example, gives users free conferencing for 2 people, and free for 3 or more up to 40 minutes. Not ready to pay? You can ‘workaround’ their premium by ending the call and starting a new one.

The point is not to jar users with an abrupt paywall that could drive them away out of spite. Rather,   minor inconveniences cleverly keep users   on your platform until, eventually, they just give up and say fine, take my money. 

Zoom uses a freemium mobile app revenue model.

Photo via Unsplash , by Charles Deluvio

Creative twist - Duolingo

Duolingo , the popular language app is free, but you have a   limited number of hearts , which you lose when you answer a question incorrectly. If you run out of hearts, you have to either wait for a heart to regenerate, or   upgrade to premium to continue using the app .

It’s an educational spin on the popular gaming mobile app revenue model of in-app purchases to speed up gameplay, but here you speed up learning through more repetition and increased pressure to perform.

2. In-app purchase (Farmville)

In-app purchase is the dim sum mobile app business model of app monetization that works well when   purchases help you advance an app’s utility   or gameplay. Think about games - in the beginning, you just want to be decent.

As you get better and your aspirations rise,   you want more powerful tools . That’s when a shop or ability to purchase   add-ons makes the most sense .

Farmville   did a great job   supercharging in-app purchases to advance gameplay . The basic concept of the game is to plant seeds in a plot of land. Those seeds grow in (sped up) realtime, so you have to leave the app and come back later to check in on them and water them.

But you can purchase a tractor, which speeds up the time that it takes for the plants to grow. Even better - the tractor can run out of gas, which you have to buy more of to continue reaping its benefits.

Creative twist    - Fortnite

Fortnite , the popular battle royale online game,   sells individuality rather than quicker gameplay . While their in-app purchases don’t give you better guns or heightened abilities, you can purchase skins, backpacks, and other   cosmetic add-ons that set you apart   in their digital social scene.

Unsure which mobile app revenue model you should use for your app?   Learn more about SF AppWorks’s AppStudio   where we help you plan, design, build and test a successful app in twelve weeks.

3. Subscription (Spotify)

The subscription mobile app business models work well for customers because they   lower the entry-level price   and   remove the hassle of repeated purchasing   decisions. Think about the shift to   subscription music services   like Spotify. Users get the promise of all the music they could ever want, when they want it, without having to think about what to buy.

For businesses, subscription mobile app business models make it   easier to predict revenue   through recurring sales and create higher lifetime customer value, which allows you to budget more for advertising and marketing. It’s a predictable form of revenue generation that is   well suited to a lot of business types , but in no place is it more advantageous to the business than in the case of fitness apps. 

adrian-regeci-SAS0lq2QGLs-unsplash

Photo via Unsplash , by Adrian Regeci

Most people struggle to stay in shape and are willing to try just about anything to move themselves towards healthier habits. Oftentimes, people believe that by paying for a gym or fitness app subscription, the commitment will motivate them to work out.

Through our research, we found that close to   half of fitness app subscribers aren’t monthly active users , yet   25% stay subscribed   for a year or more. What’s worse, when fitness users fail to utilize their app or gym subscriptions, they point the blame at themselves. 

On the flip side, offering   a freemium fitness app doesn’t make a lot of sense   from the business’s point of view. Because most users would start the free trial and never use the app enough to convince them to subscribe, they   won’t generate enough revenue to survive . 

That’s why fitness apps always charge up front, when users are most motivated to start working out and to pay for an app that helps them do that. 

* Side note : I struggled to build healthy workout habits until I learned about microhabits - tiny steps you can take every day to form a habit. If you want to run daily: 

  • You spend the first week putting your running shoes on every day at the same time
  • Then the next week you walk down to the mailbox
  • And then you jog around the block (and so on). 

We took our research and poured it into the simple, yet effective micro-habit building PushApp app, available for download here. 

Creative Twist - Pact

The fitness app Pact launched in 2012 with a novel, mobile app business model   twist on gym subscriptions . Users could   make pacts with others to get paid   when they worked out or to pay a penalty when they failed to. Unfortunately, it has since been shut down for *ahem  not paying  its users.

Related :   Ready to Hire a Mobile App Developer? Here's What to Expect

DOWNLOAD OUR MOBILE APP DEVELOPMENT CHECKLIST

4. Ad-supported (Facebook)

The   mother of all mobile app revenue models   is Ad-supported, but that’s because if you can support yourself with ads, you have an extremely sticky, fast-growing, massively trafficked product. The typical trajectory for a Silicon Valley unicorn is to   raise boatloads of venture capital   behind a   fast-growing and usually free product .

The aim is to   remove any and all barriers   to new user entry and   focus only on the widest and farthest reach   possible. Only after   achieving massive scale   do they turn on the money-making mechanism. That’s why Mark Zuckerberg doesn’t believe in monetizing digital products through ads   until they reach 1 billion users .

Types of Mobile Ads infographic

If you’re starting a new app,   don’t rely on ads   for a mobile app revenue model. It’s impossible to predict whether you will achieve the necessary scale. And, if you do, there will be many revenue opportunities available to you. 

You might not ever need to worry about it, since you’ll   probably get acquired   and your product will get folded into the parent company’s ad-revenue machine (see Instagram). But for fun, here’s a rough breakdown of the economics of ads:

Ad revenue = impressions*eCPM (Effective cost per thousand impressions)

Average revenue per impression for rewarded video ads = .02, for interstitials .16, and for offerwalls 2.50. Here’s a table with various levels of traffic and the corresponding revenue.

Average ad  revenue chart

As you can see, it   takes a whole lot of traffic to generate meaningful revenue . But as you can also see, when you have a whole lot of traffic, you can generate a whole lot of revenue.  

Creative Twist (TikTok)

TikTok, the hyper-addictive short-form video streaming app, moves users through quick, relevant video snippets in an easy to scroll fashion. The   ads mimic this content   and are often   designed to look like user-generated content , further blurring the lines between relevant content and relevant advertising. 

5. Paid apps (SkyView)

The advantage of putting your mobile app business model behind a paywall is that you can   really quickly ascertain your cost per user   and   lifetime user value . If you spend $5 on ads to sell a $6 app, then you keep spending. In reality, you have to also account for your operational costs, making the ratio closer to $1 to $5, but you get the point. 

The problem is you   only really get one chance to monetize   the user, unless you are selling upgraded versions each year. This is the traditional software model, though most software now sells for a monthly subscription. 

The ones who don’t tend to   offer limited-use functionality , such as a simple game, an astronomy app, or a selfie editor. It’s a tacit admission that the   app is probably more gimmick than utility . After all, if your app offered long-term value, why not monetize it as such? 

Creative Twist - Logic

One big exception   is Apple’s music editing software Logic. It’s offered at a high price point ($199), but   comes with a free full-use 90-day trial   that dares you to not become addicted. It’s clever because as you use the software and your data and projects grow, you become more entrenched.   And if you don’t become a fan   after 90-days,   you weren’t the target customer   anyway. 

Uber uses a revenue share mobile app business model.

Photo via Unsplash , by Viktor Avdeev

6. Revenue Share (Uber)

If you can build a marketplace that   depends on maximizing vendors/service workers and customers , you can play around with revenue sharing. Rev share is great if you have to   pay out users from day one for services rendered   because you only pay them when you earn revenue. Note that you still   need a good sized user-base   to be interesting to rev share partners. 

Creative Twist - Apple

Apple   takes a very high 30% cut   of revenue generated from its App Store. But if you build a sticky enough app to keep users onboard for a year or more, it drops to 15%.

VALIDATE YOUR IDEA

7. Sponsorship - Nike+

Running an agency? You might want to explore sponsorship as a   mobile   app revenue model. Rather than build out an app and hope for enough usage to drive meaningful revenue, you could   pitch app concepts to brands   and see which sticks. 

They might   offer you a fee to build   the app, or they   might license the app   for a monthly recurring fee. In either case, you can sell first and build later, which turns out to be a   pretty efficient way of vetting your app   ideas. 

Have an idea for an app but need help developing it? SF AppWorks can   help you create   a robust mobile app.

Creative Twist - Angry Birds

We’re   all trained to tune out ads   to some extent, but   tuning out gameplay characters is pretty tough . That’s why Angry Birds partnered with Everton Football Club to recreate human characters for your launching pleasure. The sponsorship   generated a reach of 4.8M across 100,000 impressions , along with  huge international coverage  and a prestigious award.  

See mobile app business model missing from this list?   Shoot us an email   and we’ll expand on the topic, or let us know what interesting mobile app revenue models you’ve been testing.

Related :   Hybrid Apps vs Native Apps: What's the Difference?

https://www.quora.com/How-much-money-does-a-free-app-make-from-advertising

http://fieldmarketing.com/news/everton-angry-birds-named-best-gaming-based-sponsorship-uk-sponsorship-awards/

https://www.ironsrc.com/glossary/ad-revenue/#:~:text=How%20much%20money%20do%20apps,interstitials%20and%20%242.50%20for%20offerwall.

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Andrew Greenstein

Related articles.

How to Write a Mobile App Business Plan + Free Template

Male and female entrepreneur sitting at work station comparing specs and writing code as part of their mobile app development business.

Anthony St. Clair

11 min. read

Updated February 7, 2024

Free Download:  Sample Mobile App Development Business Plan Template

When Apple released the first iPhone in 2008, it also launched its App Store—with about 500 apps. Nowadays, the number of apps on the Apple App Store and the Google Play Store totals about 5 million. If apps were people, they’d outnumber the population of Los Angeles.

Sure, the “gold rush” days of app development are long behind us, but building apps remains a solid way to bring useful or entertaining services to market. An app can also be part of a narrow or broader business strategy.

But with so much competition, building a profitable, successful app takes more than just an idea and a team of mobile app developers. You need a business plan to help guide your vision and implementation. This article will cover the steps to create your mobile app business plan, along with some tips to run it successfully. 

Need more guidance? Download our free mobile app development business plan for a full business plan outline that you can use to inspire your own plan.

  • How to write a business plan for a mobile app

A business plan can be as short or extensive as you need it to be, and not a page more. In fact, you could launch a successful business based on even a one-page plan for your app development firm.

Writing a business plan for your mobile app business comes down to thinking through where you are with your app idea, what you want to accomplish, and how you think you will get there. A good business plan gives you both a starting point and a road map, but you can always review it and update it as you go.

At its heart, that’s all your app business plan needs to do.

Here are some of the key things your mobile app development business plan should include.

1. Determine what kind of app you will develop

Competition and opportunity co-exist throughout every app sector. If you’re still trying to decide where you might want to target your app development , strong contenders and trending app verticals include:

  • Productivity
  • Shopping (mobile-specific and general eCommerce)
  • Health and Fitness
  • Personalization

The sector you’re developing your app for influences the type of app you’ll want to build. For example, will you code for Apple iOS, Google Android, or both? Will you focus on a web or hybrid app? Is the app an extension of a website or other business channel? 

You’ll need to have this information defined up front in order to conduct proper research and easily write your business plan . 

2. Conduct market research and identify competitors

It’s one thing to have a good idea for an app. But the real question is, does the idea have a market that will be hungry to buy in?

As you develop your business plan, understanding your potential customer base is key.

For starters, evaluate similar apps and competitors in the vertical you are developing for—especially if there is already an app doing something that you want your app to do. As you conduct research and put together a market and competitive analysis, be sure to think through the following questions:

  • Who are their customers?
  • Are they the same ideal customer and target market ? 
  • What steps will your company take to engage the market and involve them in testing and promotion? 
  • What are the demographics (such as profession, age, or sex) and psychographics (such as opinions, hobbies, and lifestyle goals) of your target market? 

If you don’t understand the market for your app, it will be difficult to get them to find, install, use, and tell the world about your app.

Researching the market and your competitors can also clue you into expected app features, pricing and revenue models, gaps in services, and pain points that customers feel aren’t being met.

Understanding these factors can also help your business plan address a potential threat to your app’s viability: abandonment. User retention can be challenging throughout the app market, with 25% of customers using an app one time and then ditching it. So, be sure that you take into account how to attract new customers as well as how you’ll keep them around.

3. Positioning and promotional strategies

Once you’ve proven the market demand for your app’s concept, you should start figuring out how to promote your app and position it in the marketplace. Your business plan doesn’t have to include a detailed marketing plan . But it can be the perfect place to set up a few essentials that can guide your app’s marketing throughout its development and release cycles.

At a minimum your plan should include foundational messaging for pitching, branding, mission, and your overall sales and marketing strategy for your app, such as:

Develop and refine your elevator pitch

How concisely can you get across what your app does, why it’s needed, and what will make people love it? Can you talk up those key points with anyone from potential investors to your ideal customer, developers, and engineers to your mom and your best friend?

Examine how you’ll build awareness, interest, and need for the app

Will early testers be part of your outreach? Will you work with social media influencers, traditional media, or celebrity endorsers? How will you articulate the problems your app solves or the joy it provides?

What are some of the branding and marketing tasks your startup will pursue? 

For example, what is the company name? The app name? How will you engage your market on the social media platforms they like to spend time on? What original supporting content will attract the interest of your key audience?

In your business plan, it’s essential to understand your startup from the point of view of a founder and key player. But the marketing and promotional components of your business plan help you see your app from the point of view of an outsider, such as a customer or investor. The better you understand these other points of view, the better you can develop your messaging, build your app, and make it a success.

best business model for app development

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4. Startup costs, financials, and pricing

Figuring out the potential startup costs for your app is not a one-size-fits-all equation. Generally, these are some of the factors to consider as part of your financial plan .

Platform development

Expect different development costs when developing for iOS, Android, or both. Your process will include defining a function, outlining what you need for your MVP, wire-framing, coding, testing, designing, and more.

Internal employees or outside contractors? 

If you’re planning to build up a full-on firm with employees, benefits, and offices, you will be looking at a different cost structure than if you want to outsource to a contracted development company or work with a freelance team that’s not employed by your app startup. That team may need pros in charge of mobile and backend development, design, QA, customer support, design, marketing, managers, and more.

The resources you have and the resources you need

How long it’ll take to develop and release your app depends in part on the resources you have access to.

Successful apps monitor and improve. Did the app crash? Is it scaling sufficiently to handle increases in use and load? What usage metrics are you monitoring and analyzing? How will you need to update the app to deal with OS updates?

By understanding these and other potential costs, you can develop a budget in your business plan. For more in-depth financial considerations, you should develop forecasts to gauge costs, future cash flow , and how your app company might grow and change over time by hitting release and growth milestones.

5. Development milestones

The release of your app is a milestone that’s farther down the road. In the meantime, you’ll be developing milestones that reflect major accomplishments in the development process. Your business plan can reflect some of those milestones, such as:

  • Production of key features and functions
  • MVP completion
  • Testing and refinement
  • Acceptance of app in app stores
  • Achievement of sales and adoption goals
  • Implementation of new features and versions

Remember, app development takes time. Focus your initial milestones on pre-release goals. From there, you can set and work toward post-release milestones that can pave the way to future growth, releases, and profits.

  • Mobile app development tips for startup growth

As you develop your mobile app’s business plan, here are a few other tips and considerations to keep in mind.

Native, hybrid, or web?

Creating apps tailored to each OS—Apple and Android—can cost the most to develop, but also can maximize your app’s performance. The better the performance, the most adoption and use you could see in your target audience. 

At the same time, other apps work solely on the web, and others are developed as hybrids. Hybrid apps can help you manage team and development costs, but they typically can’t take full advantage of each OS.

As a rule of thumb, typically the more complicated or intense the app’s function, the better it tends to be to develop a native app. Lightweight functions may work fine in a web or hybrid environment.

Security and privacy

Privacy and security are at the forefront of customers’ minds as well as industry discussions around app business models. If you are developing for regulated industries—such as health care or financial services—there may also be legal privacy and security requirement to adhere to.

Decide on a platform: Apple, Android, or both?

If your target market is predominantly on one OS, that can guide your development decisions. Developing for both platforms requires more resources, but can give you the benefit of maximizing your ability to develop the app for each OS, and reach the most customers. Another option to consider is launching on one platform and adding another over time, depending on milestones in your business plan.

Offline vs online

A growing consideration in today’s app development firms is whether the apps can only function online, or if it can function offline too. Some level of offline function—and messaging that the app is offline—can make for better customer satisfaction, since users will have access to at least some features regardless of their internet connection.

For example, Google Maps can download route information so a user still has the mapping and some functions, even if they enter a remote location or go through an area where they don’t have a cellular or wifi signal. 

Walking users through what they can and can’t do offline, and how functions can be completed or data can sync once online again—can also go a long way to winning trust and loyalty from your app’s users. You’ll also want to determine if the offline function is something you develop as part of the launch, or if you roll it out in a later version.

Revenue model: Free/freemium, subscription, in-app purchases, ads, or a combo?

Apps can drive revenue in many ways. A common strategy is a freemium model: Offer a free baseline app, but other features can be unlocked with purchase or subscription.

Subscription models (usually with a tie-based free trial period) have also become increasingly popular in companies, and they are finding broad acceptance in the market. An app can also drive revenue by being a mobile commerce tool, helping customers complete a transaction from the convenience of their phone instead of having to go to a browser, non-mobile device, or other fulfillment channels.

Some apps are only available for purchase, often as a way to showcase an app’s superior or unique place in the market. Once purchased, though, other revenue models can come into play. The popular game Minecraft is a prime example: Customers purchase the app, but the Minecraft Marketplace offers in-app purchases to further customize the game.

Test properly before launch

If your app doesn’t work at launch, it may never recover from that stumble.

As the app reaches development milestones, ongoing testing can help you find and resolve problems before you have to deal with them in the deployed product. Conducting extensive testing across various devices, users, and OS versions can help you catch problems before they harm your new app—and your startup’s viability and profitability.

  • Download your free mobile app development business plan template

Our free mobile app development business plan can give you the template you need to start setting up your business plan—and your business. It’s just one of hundreds of free sample plans that have been time-tested by our team and by thousands of entrepreneurs all over the world.

The question is simple: What mobile app development business will you create? Whatever it is, your business plan can help you get there. Download your free plan now and get started.

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Content Author: Anthony St. Clair

Anthony St. Clair is a business copywriter, author of the Rucksack Universe travel fantasy series, and a craft beer writer specializing in Oregon. Learn more at anthonystclair.com.

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App Development Process (2023)

best business model for app development

Mike King | July 13, 2023

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Starting out on the app development journey can reveal an overwhelming number of development options. But with the right app development process to hand, it’s much easier. In this research piece, we’ll uncover some tried-and-tested approaches to the app development process that draw from academic papers, research, statistics, and examples. And we’ll include a review of the app development lifecycle and the app development steps while suggesting the best content to include in a PRD (Product Requirements Document) to use with developers.

By following the app development stages, from ideation to wireframing, market research to cross-platform development, businesses can increase their chance of success. Plus, using a Mobile App Development Strategy-Finding (MADSF) model may offer some advantages in selecting the most appropriate programming environment.

In recent years, both Android and iOS have generated over $130 billion in revenue for the mobile app industry . And with increased demand for video conferencing, e-commerce, and growth into areas such as AR/VR, IoT, e-commerce, and wearable technologies– which reached a CAGR of over 20% last year –there’s now a plethora of app development options that can be overwhelming.

So how can businesses choose the most appropriate mobile app development strategy for their context? By drawing from academic research and statistics, and defining the app development lifecycle and stages, we will reveal the most effective app development strategies to improve your chances of success when engaging in mobile app development.

What is the app development process?

The mobile app development process (MAD) is a term used to describe the entire process of app development, from ideation and design to development and execution. Flora, H.K., Wang, X. and Chande, S.V. (2014) suggest the MAD process differs from traditional software development in its need for having a profound understanding of what mobile applications are. They also posit that functionality, reliability, flexibility, accessibility, portability, efficiency, maintainability, usability, and responsiveness, iterated in line with users’ requirements, are elements that differentiate mobile app development from desktop applications.

How are mobile apps developed?

The MAD process can include a wide variety of technical and procedural approaches. And success will depend on many factors such as resources, expertise, market positioning, and team capacity. Plus, during the app development process, many alterations and obstacles occur such as tight timeframes, frequent User Testing (UT), and production cost constraints.

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But at the start of the MAD process, developers face a choice of methodologies. These are either the more traditional and structured Waterfall approach aka Cascade, or an Agile methodology that may include DevOps, Kanban, and Scrum. Choosing the right methodology can be a make-or-break decision in the app development process. And since it’s an important decision to make, we’ll explain more about the choice of methodology in the coming section.

Most popular software development methodologies worldwide 2022

Bar chart revealing the most popular app development process

How are mobile apps developed through different methodologies?

The Agile methodology encourages early ROI through iterative and collaborative project management. Agile methodologies allow teams to work on project phases concurrently and to short-term deadlines. Plus, being agile, there’s flexibility to shift direction at short notice or experiment with new approaches.

DevOps is now the world’s most popular Agile approach. And it offers a set of practices that promote a more rapid development cycle. But it also supports the adoption of automation, microservices, security, and service virtualization in the mobile app development process. Over 35% of software development teams prefer DevOps . Plus, a review of MAD methodologies used in the Omani market suggests Agile methodologies are also the most popular form of development in the app development process . On the flip side, Waterfall relies on a tried-and-tested, linear approach to the app development process. And it usually runs through five to seven structured stages, i.e.: Requirements, System Design, Implementation, Testing, Deployment , and Maintenance.

What is the mobile app development lifecycle?

So, with a clearer picture of the MAD process, the available methodologies, and general philosophies, let’s explore the question of how are mobile apps developed in alignment with the mobile app development lifecycle. While there are different takes on what the app development process or lifecycle should look like, we’ve defined it across four principles:

  • Frontend Development
  • Backend Development
  • Post-Launch

The pre-launch phase aims to identify the core concept and goal of an app. It’s important to get this stage right as it determines the success of the final outcome. The pre-launch stage begins with a clear vision of an app and its functionality. And teams must carry out plenty of research and design preparation to succeed.

3 Sided Cube

Developers should also review UI/UX during this period, with the ideal outcome being the production of a prototype. Flora, H.K., Wang, X., and Chande, S.V. (2014) found over 50% of surveyed respondents said designing a prototype for an excellent user experience should be the top priority in mobile app development. But a prototype can also make an application more successful by maximizing acceptance and usage. Both data suggest User Testing (UT) should form a key component of the pre-launch stage to ensure success.

To assist with selecting the best programming environment and development approach, UT, research, and prototypes discovered during the pre-launch should also inform a Mobile Application Development Strategy Finding model (MADSF). This particular model can assist developers in selecting the most appropriate methodologies for their context. But it can also lead them to an optimal development strategy that suits their goals and informs their own mobile app development process.

In the research paper by Edgard, G., and MBAYEN, M. (2013) A Mobile Application Development Strategy-Finding Model , the authors have created their own model to assist developers to choose the best approach to development. Abbreviated to MADSF, five milestones make up the model. And to ensure developers select the best app development strategy, they should follow each milestone stage.

A Mobile Application Development Strategy-Finding Model: Milestones and Variables

MADSF model as part of the app development process

The authors suggest asking the following questions at each stage:

  • Purpose: Will the app be for demonstration purposes or a business marketplace?
  • Device Target: Which mobile platforms will the app target and on which devices?
  • Core Device API Utility: Would the mobile application use the Core Device API feature?
  • Update Process: Will the mobile app update from the server side or the usual mobile application marketplace?
  • Quality Standards: What level of quality will the mobile application aim for – high, medium, or low?

Developers can also use the MADSF model in the pre-launch stage to support in making a decision on the most appropriate development structure.

Frontend development

The second phase of the mobile app development steps is frontend development. This differs from UI/UX in the way that front-end developers work on an app’s functionality. Translating pre-launch visions and UX or UI designs into code is the main aim here. So, developers must ensure interface elements lead users to their intended places and that data gets stored for processing.

best business model for app development

In the front-end development stage, developers review all designs, architecture, and interfaces, including payment gateways. They can also speed up development using reusable codes. Mobile app development features may be light for initial versions or to meet MVP requirements. And if business owners or developers use a MADSF model, it may help them decide on which of the following could be the most appropriate to their needs:

  • Native: Often used for a single platform with programming languages and tools specific to that platform. Examples include developing a native Android app using React Native, Java, or Swift and Objective-C for iOS apps.
  • Hybrid or Cross-Platform Functionality: Apps development that works across several platforms. This is often favored by startups who prefer the reduction in time and cost. Apps are faster to build but need an abstraction layer that can result in lower performance.
  • Web to Native: Web Native is a form of cross-platform mobile application development using web technologies to create native mobile applications for iOS and Android, as well as mobile-optimized Progressive Web Apps (PWA).

When choosing the right type of app development approach, developers will consider many aspects of the prototype or pre-design phase. These can include the degrees of customization, personalization, security or authentication, social media integration, app speed, customer service support, and levels of responsiveness.

Backend development

This is the flip side of frontend app development. And it’s where the final stage of app development takes place. Its role is to support the building of system architecture, databases, servers, application programming interfaces (APIs), security, and several other background processes. And it does this by laying down the foundational code that enables the app to process actions from the frontend.

Types of mobile app backend solutions include third-party SaaS, MBaas Solutions, and custom-built backends. Many factors influence this choice, including budget, scale, and whether the development will be in-house or through a third party.

For example, an ecommerce business app may handle content such as images and videos, or other forms of media. In this case, either a headless CMS as a SaaS product may be the best solution or even an off-the-shelf ecommerce business platform .

Also, security and functionality are two areas that developers will focus on during this phase. And since iteration is a big part of the development process, it’s important to note the differences between the first and final releases. If the priorities of the app change, developers who work with Agile methodologies may gain from swapping out functionality at each iteration of development.

Post-launch

The post-launch phase acts as a bookend for all the mobile app development stages. It’s a critical and sometimes overlooked aspect of the mobile app development process that’s defined by support, tracking, and maintenance of the app to ensure relevancy and smooth running. Also, app security is critical and demands app developers’ attention to support the uncovering of bugs and any errors in code before release.

Mobile app users are likely to lose interest or disengage if they find any navigational issues with an app. So, carrying out Quality Assurance testing, User Acceptance Testing (UAT), and Test Driven Development (TDD)–where feature components get converted to tests–is vital at this stage of the app development process.

Once testing is complete, deployment can start. If developers choose to work with DevOps they should conduct Continuous Integration (CI) and Continuous Deployment (CD) techniques as part of the DevOps LifeCycle.

ELEKS

What are the steps of the app development process?

The four-phase framework of the app development lifecycle offers a helpful, birds-eye-view of the app development process. But how does this play out in more granular detail? Here we’ll explain the various proven app development steps that optimize outcomes.

Idea creation

All instances of mobile app development must follow a series of stages that start with ideation or envisioning. This phase is critical to ensure an app addresses business requirements and users’ needs. Furthermore, the idea creation stage will determine the objectives of the app. And this can drive decision-making while defining the services that the app plans to offer.

In another piece of research, Flora, H.K., Wang, X. and Chande, S.V. (2014) showed 60% of surveyed respondents thought mobile apps should be simple and focus on specific features. They see it that apps should not attempt to do everything but have their own specific goals.

A good outcome from this stage, then, is to establish an MVP (Minimum Viable Product) that defines provisional app features, functionality, and purpose. And once there’s a clear vision for an app, developers can move to the next phase.

Market research

The market research phase draws from the ideation stage by focusing on gathering data, conducting user research, competitor analysis, and budgetary analysis that realizes the idea and informs any cost/benefit decisions. This phase is also likely to include a review of the most appropriate programming languages such as PHP, Javascript, or Swift. But also, any appropriate databases and infrastructures required for frontend and backend development.

Further research elements confirmed during this stage include the following:

  • Target audience and personas: Establishes who the potential users are.
  • User Testing: UAT may be appropriate to carry out at this stage.
  • Competitor analysis: Reviewing competitors and understanding how the app fits within the industry or sector ecosystem.
  • Potential investment: App development requires time, effort, and money.
  • App marketing trends: Assessing the potential marketing strategy.

Sketch concept

The next app development step is the sketch concept. The objective at this stage is to ensure the main idea of the app or website is clear to everyone involved. This is the right phase to test usability and underline functionality while securing buy-in.

Sketching out the concept of each individual app screen or function to secure feedback from developers or users is the main objective. This stage sees proposed features and functionality explored and each phase sketched out in the appropriate structure. Doing so will inform the next stage of wireframing. Plus, the sketch concept stage is useful for exploring challenges such as cross-platform compatibility, data access, and any uncertain or insufficient requirements.

Wireframing

With a firm conceptual idea in place, deep market research, and a pictorial depiction of the app in the form of sketching, marketers, and developers can use wireframing to visualize the app. Wireframing is an important way to validate app development basics and all mobile app development features. It can be seen as a blueprint for building an app, ensuring it’s built on solid foundations. Marketers and developers should use this stage to analyze each aspect of the app and make sure users understand the impact the app intends to have.

The wireframing process may commence with low-fidelity sketches via pencil and paper , before progressing to medium or high-fidelity wireframes. One example of low-fidelity and medium-fidelity wireframing is the process behind the weather app Sundayz. Their wireframe process started with simple pencil sketches and preceded more formal wireframing in Balsamiq.

Wireframing Examples

Wireframe sketch as part of the app development process

Source: anamichandesign.com

Without wireframing, the coding stage becomes very difficult. And it’s coders that are most likely to bring a wireframe concept to life. Coders have the important job of ensuring functionality and building the concept into a test or fully functional app.

During the coding phase, developers must ensure cross-platform compatibility with different operating systems. For instance, apps developed for Android users must be able to work both on current Android versions as well as older ones. The coding stage may focus on building an MVP with enough core features to complete basic functionality. And since a network will transfer data, encryption may be a key focus. Particularly since some apps sync data with online sources. To prevent attackers from gaining access to valuable information and resources on a mobile device, developers may use a Secure Sockets Layer (SSL) that encrypts client information or asks for a validated mobile certificate. In the first iterations of frontend and backend development, coding is likely to be full of bugs and glitches. And this takes us on to the next topic.

The testing stage of the app development process exists to ensure the elimination of coding bugs. It may include a period of UT (User Testing) and a cycle of test-driven development (TDD).

Flora, H.K., Wang, X., and Chande, S.V. (2014) also suggest app testing should be on real devices and recommend testing frequently, iteratively, early, and as often as possible.

With testing complete, it’s time to deploy the app. And there are two phases to launch – one is deploying your web server (API) into a scalable production environment. The second is deploying your app to the Google Play and Apple App Stores.

Most mobile apps need a server back-end to function and to transfer data to and from the app. Servers deployed to a scalable environment such as Amazon Web Services (AWS) should be able to handle any spikes in traffic. This will also make it easier to achieve scalability.

Then, deploying apps to the App stores needs proper configurement for release, including metadata descriptions and marketing materials. To launch an app to the App Store or Google Play Store, developers need an account. And since Apple reviews all apps submitted, they may also need to make changes to follow regulations.

App development process requirements

Having followed through with the app development steps and app development stages, business owners can now engage with app developers using a Product Requirement Document (PRD). A PRD is a project management tool that helps to articulate an app’s vision, aims, and objectives. It’s a single document that reflects a combination of a Business Requirements Document (BRD) and a Systems Requirements Document (SRD). The elements of a PRD should include the following:

App purpose

Every PRD should define the purpose and objectives of the mobile app. This includes an outline of the following:

  • Which problems the app seeks to solve
  • What the app intends to achieve
  • A profile or personas for app users
  • The type of experience app users expect to have

Clarifying the objectives and purpose of the app helps to influence stakeholders and third parties. All parties should agree on the purpose and support the progression and development of the app.

User personas

A user persona is a customized fictional character representing an average targeted app user. They usually present as a user profile and include characteristics, behaviors, goals, and pain points of intended users. User personas should clarify what people do, why they do it, and what they want or need from a product or service.

Some reasons why user personas are helpful include:

  • Help define the context(s) of the app
  • Easier to predict user behaviors on the app
  • Clarify what users want or need from an app
  • Highlight the difficulties users may want to overcome through the app

App features & functional requirements

A PRD should also include a list of key features and functionalities of the app. For instance, to build a responsive app, elements such as UI area, network access, functionality, social media connectivity, and database access are important to consider during development. Being personalized and fitting users’ needs are also key.

Other considerations for app features include localization and reach. And where mobile devices have the advantage of global positioning systems and cameras, localized features may boost User experience and set an app apart from its competitors.

UX & app layout

Flora, H.K., Wang, X. and Chande, S.V. (2014) found over 75% of the survey respondents confirmed user experience (UX) to be a deciding factor in mobile apps. They also suggest that to get an excellent user experience, a user should feel comfortable with gadget interaction. But they should also feel smart enough to achieve any task with intuitive use, and without any tutelage or help. L. Chand et al. (2014) also states that the mobile app development process has a strong emphasis on User Interface (UI) design and that mobile app developers may find it more challenging to make full use of more limited screen space.

This also relates to UX where a smaller display, screen layouts, and different user interaction styles have a significant impact on mobile app design. If not designed well, this can lead to low adoption and usage. So, mobile applications may share common elements of the UI with other applications. If so, they must adhere to developed UI guidelines implemented in software development kits (SDKs) as part of the platform.

Technology and infrastructure requirements

A PRD should include a description of the methodology, IDE, and technology infrastructure needed as part of the mobile app development process. For example, this may be either Native, Web to Native or Cross Platform Native. Making use of the MADSF model here should be helpful in assisting any choices.

Some aspects of tech to consider include:

  • Databases, servers, services, and whether they’re cloud-based.
  • Which operating systems your app should support
  • Any documentation for API
  • Maintenance and any future support
  • Distribution infrastructure

Potential constraints and obstacles

Finally, a strong PRD should feature any assumptions gleaned during the mobile app development process. For example, if the app developer plans to use a third-party library, it may be less reliable. Plus there’s no guarantee it wouldn’t feature vulnerabilities or problems that may influence project management.

Security is also a key aspect at this stage of the app development process. Mobile developers should integrate a platform’s security capabilities but also consider the encryption of sensitive data across both open and unsecured networks. This stage must also factor in all potential technical constraints and possible feature dependencies and show if one feature does not work without another.

How much does the app development process cost?

Understanding how much it costs to develop an app depends on the developers’ level of engagement in the process. For instance, one option is to go the route of a Full Cycle Agency or app developer to custom-build or complete any unfinished apps. But there’s also no code or low code, off-the-peg solutions in the form of app builders . And, if there are enough resources, capacity, and finances, in-house development could be an option. But this will come at a cost along with the need to onboard and integrate staff.

App development cost benchmarks

As highlighted in our App Development Cost research article , it remains difficult to specify a principal budget for app development. But we have outlined some simple benchmarks in our article that can help. Also, for reference, it’s worth reviewing our research paper on the average cost to hire an app developer .

Mobile app development best practices

To recap our report, here is a summary of the best practices in app development:

  • Determine a strong reason for creating an app and make sure it doesn’t replicate an existing app.
  • Give users control over their data. But also, try to maintain the simplicity and clarity of the application from the customer’s perspective.
  • Include user interaction and performance reviews, followed by frequent and rapid iterations of requirements during testing.
  • Design a prototype to achieve excellent UX.
  • Speed up development with reusable codes and light features.
  • Consider an Agile approach that you can tailor to each development team.
  • Use TTD, pair programming, regular code reviews, strong QA, and constant measurement post-launch.
  • Consider encrypting sensitive data across open or unsecured networks.
  • Build privacy into mobile apps with open communication, clear and simple language, and choices for users.
  • Use an analyst to analyze performance.
  • Use emails, social media, and bug reports to collect feedback from users.

Final thoughts

Developing and marketing a successful app isn’t an overnight project. It requires careful planning, consideration, and a methodical approach to development. But, by following the app development process, business owners can find frameworks that help to guide them in choosing the most appropriate technical and procedural approaches to any app context. And by following the app development steps, they’re more likely to launch a well-designed and developed app.

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  • Case studies

Business Model Canvas for Mobile App: How to Find an Idea?

Dmytro Dobrytskyi

Dmytro Dobrytskyi

Anton Baryshevskiy

Head of Business Development

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Business Model Canvas for Mobile App: How to Find an Idea?

Our life is a journey, idea is the guide. Without the guide everything stops. Victor Marie Hugo

As every morning begins with a sunrise, so every business begins with an idea. Your idea is a guide to forming your business — in this case, a mobile app startup.

In this article, we help you start on the hard but exciting journey of launching your mobile application. What steps should you take to turn your idea into a successful startup?

There are a huge number of tools that will make life easier for you when developing your mobile application. Indeed, you can write a business plan for your financial attractiveness to investors or create a business model canvas for a mobile app, proposed by Alex Osterwalder, as a more adaptable form of the business plan.

As Jeff Bezos notes , however, no business plan will survive its first encounter with reality. There will always be something unexpected. Reality will never be according to plan. It needs something more flexible, something that can be modified. Therefore, in order to implement technology startups, namely in the early stages of launching your mobile application, we recommended starting from a business model canvas (for example, Uber business model canvas ) that visualizes your strategy and identifies your goals.

Eric Ries [], in The Lean Startup , notes that “startups become a business when they search a repeatable and scalable business model. In essence, this type of business model is nothing less than a set of steps that you can track again and again, which gives you revenue.”

Business model canvas structure

What is the business model canvas for mobile apps?

The process of launching a new project or startup that deals with mobile app development is, as a rule, united around all key aspects: the project idea, the mechanism by which it functions, the principle of budget allocation, your target audience, and so on. Obviously, you have to keep the details of each aspect in mind and continuously monitor the process of their implementation.

How can you remember each of them?

What can help you to see the whole picture of what’s happening?

App business model canvas

An app business model canvas is an excellent visual tool that describes the value proposition of your product, its structure, your customers, and the financial part of your business. This diagram allows you to document the entire shape of your business model.

You can form your hypotheses and verify them, for example based on statistical data ( client’s base surveys ). The risk is that it’s not clear how the market will react to your business model for the application. Depending on these results, you will need to make interim conclusions and rework the raw data if necessary.

To compare a project with workout of the muscular system, the canvas will allow you to work out all the muscles of your project skeleton due to its iterative properties and help you achieve the desired result.

Just do everything carefully and correctly and the process of launching the mobile application will be started!

The business model canvas is your tool to turn from idea to market.

The business model canvas for a mobile app is characterized by three main things:

  • Clarity . The visibility of the canvas allows you to concentrate the material of a traditional business plan into a single-page plan and also focus on the main idea.
  • Flexibility . The business model canvas is presented in the form of a diagram and can be changed.
  • Simplicity . The diagrammed scheme of your business model is much easier and faster to understand than written multi-page text. The canvas shows key points to your team.

Imagine that you’re at the point in the mobile application development process when you need to fill out the business model canvas. Let’s start with a detailed examination of the canvas, its main parts, and their interactions and general functions.

How to fill out a business model canvas for a mobile app

The classic business model canvas for launching a startup, whose structure we will describe below, can be supplemented with the following:

  • The date on which things are entered into the canvas
  • Information about who will be responsible for notes on the canvas since the development process is interactive
  • The memorable and original name of the mobile application identified earlier
  • The logo of the application that corresponds to the selected name (you can find it on the Iconfinder page embedded in the RealtimeBoard library )
  • Information about the language that will be used in your application (depending on which market you’re going to launch this application in)
  • A list of your team of app developers with a detailed presentation of positions

In addition to the traditional business model canvas proposed by Alexander Osterwalder, the Lean Canvas by Ash Maurya is popular for startups .

Auxiliary categories in your canvas

What else can be included in the classic canvas?

  • You can add a field with a description of your application and briefly talk about its concept, its present, and its future.
  • Use an MVP (minimum viable product) to quickly and qualitatively test your product on the market.
  • Define the basic functions of your mobile application, arranging them in order of priority.
  • Introduce an approximate budget for developing the application.
  • Add photos and videos to canvas blocks for clarity.

All these actions are consistent with the interests of the target audience for your mobile app .

Your success factor

What is the success factor for you? What will help you achieve the desired result? Most often, the success factor is determined by the quality and power of the idea as well as the desire to realize it. Professional excellence of your app is key to achieving success: the availability of effective and reliable technologies, an original and attractive design for your application, a functioning, well-established partnership, and a good reputation on the market.

Read more: How To Find an App Development Partner?

Your advantages

Be sure to identify the benefits of your product over other applications so that you can show them to users. What will change in their lives when they start using your product? One of the advantages is the awareness of competitors which is to determine a competing business model. What share of the market do your competitors occupy and what technologies do they use?

Visualizing your mobile app

Visualizing your application is one of the main factors in achieving success. Answer the following questions: What is the purpose of my application? What problems does it help to solve? How will it develop in the future? Among the variety of offers on the market, identify your niche. Clear visualization and presentation will provide you with an understanding of your product from the perspective of potential users.

A segmented canvas

Let’s consider the strategically important segments of the business model canvas for an application with Lean Canvas elements. We’ll supplement the theoretical part with an example of a business model canvas for the Strava mobile application.

Read also: How to make an app like Strava?

We’ve identified three problems that this application solves:

  • It enables clients to effectively track the progress of their training and share their results on social networks or within the system.
  • It provides interesting travel routes.
  • It supports self-organization by application reminders and controls high-level health by providing advice and motivation.

Problems img

Our team analyzed competitors that solve similar problems.

existing alternatives img

Segment: solutions

If you use Lean Canvas for your startup, you can add a block to the business model canvas for an app that describes a possible solution to each problem.

Strava is the best tool for sharing results and feedback, is an indispensable route planner, and is an effective tool for managing your health.

solution segment img

Segment: key metrics

When using Lean Canvas, don’t forget about key metrics that include the range of products or services that you want to provide. The main goal of key metrics is to determine the correct metric under which your business is operating (in other words, to show key performance indicators); if you use the wrong metric, the chances of success will be minimal.

The key metrics for the Strava mobile application are:

  • Number of installations
  • Number of daily active users
  • Number of subscribers
  • Reviews on the App Store and Google Play Store

key metrics img

Segment: key partners

This is an important step in the development of your business because it allows you to move from idea to implementation. A partner can act as a motivator for you and your model. What you need from your partner is support and a driving force that can provide growth. And you can have more than one partner. This segment is connected to and interacts with the key activity segment because each partner can engage in a certain key action.

The Strava application regards GPS technologies and also sports shops, focused on the sale of bicycles, as partners.

Segment: value proposition

Value proposition img

One of the defining categories for any product is its value proposition. To motivate each segment of customers, you can look at your value proposition: Which problems does your application solve? How can you interest the customer in your product as an alternative to a previously used product?

Using sports applications, you fix the beginning of the track (as a rule, this is the place where you live or work) and its ending. Strava solves your security problem by designating a track as a cloud in the app. This action provides you with privacy information, where your track begins and ends.

A value proposition describes what distinguishes your product from others on the market. You can formulate your hypotheses, set their priority, and after that determine a quick and efficient way to prove or disprove them. In other words, your value proposition must address the product’s relevance, profit, uniqueness, and how it improves the value of your customers’ lives. A value proposition should be based on the minimum viable product (MVP). Facebook, Spotify, Airbnb, Twitter, Pebble, Foursquare, and Dropbox are all examples of successful MVPs.

The value proposition of Strava is to be the user’s route designer, in other words, to provide a large collection of interesting tracks in different countries/cities that will help users enjoy running and cycling anywhere in the world.

UVP img

Segment: clients

The relationship between the value proposition and the client is unshakable. If your mobile application doesn’t satisfy the customer’s request, then in the long term your business won’t develop and the market will lose interest. In addition to the concept of a minimum viable product, we introduce the concept of a minimum viable audience.

Developers often use the concept of a target group, namely a group of users defined by various criteria: age, gender, interests, or spending habits, for example. In this section, you should ask the following questions:

  • Who is our potential customer?
  • Where is our potential customer?
  • What is our potential customer interested in?
  • Why does the customer want to use our application?

customer value segment

To better understand the audience, you can use the personas method, which simulates the potential customer. In order to represent the different potential user types of your app, you can choose fictional personas, which are based on your research.

In addition, it’s effective to explore the audience visually using an empathy map. An empathy map gives you an opportunity to unite users, buyers, and partners. To create an empathy map, create four areas with the titles thinks, sees, does, and feels, and in the center place the user. If you have several user personas, then create an empathy map for each of them. Next, fill each area with stickers that match the subject area (segment). You can fill the empathy map with stickers, group them, and move them around to find the best solution. Mapping in this way will help you identify research deficiencies, hidden user needs, and factors that affect the behavior and choice of users. It will also help you create visual ideas.

Empathy map

As for the strategy of attracting clients, feedback from potential users, customers, and partners are important. Eric Ries suggests introducing customer development techniques to validate your hypotheses and evaluate all elements of your business model, including product features, prices, and distribution channels.

Among its potential clients, Strava distinguishes two groups:

  • men/women aged 17 to 35 with inactive work who want active running/cycling
  • men/women aged 17 to 35 who like activity every day and want to track this activity

Customer segment

  • Strava also focuses on early adapters, so-called ideal customers: men/women aged 20 to 25 who like to track the results of their daily running/cycling activities.

img early adopters

Segment: channels

Channels as a segment of the canvas plays an important role. A channel is a way of conveying important information (including the value proposition) from your team to your customer. With the help of channels, this information enters your business model and becomes part of it.

As in the previous segments, we ask: Where are our customers? How can we inform them about our value proposition? From what sources do they prefer to receive new information?

Indicate in this segment that you’re developing a website where you’ll provide all information about the mobile application. If your application is intended for iOS or Android, then the respective app stores can automatically be channels.

Social media, email, SEM, SEO, viral marketing, blog targeting, sales and promotions, existing platforms, PR, social advertising, trade fairs, content marketing, community building, and offline advertising (billboards, television, radio) are all examples of channels. You should constantly search for new channels.

Sporting events are among the channels for Strava.

Strava canvas - Channels

Segment: customer interaction

Which relations are you building with each segment? Are these relationships personal, automated, self-serving, or retention-oriented?

When interacting with clients, your goal is to preserve and develop your relationship. A company’s relationship with customers is defined as the interaction of the whole business with its customers.

How do you communicate with customers? In person? By phone? Over the internet?

For mobile applications, feedback is very important as it allows online identification of the problems and helps you overcome problems, thereby improving the efficiency of your operation and support services and the application as a whole. Prepare to provide personal support to control all segments in the early stages of the startup according to the Lean Startup methodology.

In addition to developing customer personalities, described in the client base segment, it’s useful to create a user journey map for your customers in order to be effective with regard to marketing, UX, and merchandising.

So, in conclusion, we can ask: is it sufficient to have just online and offline communication? You need to see the full picture of the interaction in order to understand what motivates customers to use your product, what customers want to get when coming to your platform, and how well they can achieve their goals by using your product. If this process of interaction is analyzed and coordinated at all stages, you will have rapid results: you will keep your customers safe, know how best to interact with them, and also determine the automation possibilities of this process.

Segment: revenue

Determine the best revenue stream for your startup. In our article about business plans for mobile applications, we proposed consulting some methods of monetization (application fee, fee for services, fixed rate, advertising in the mobile and well-based applications, profit, etc.). Choose which method suits your application and will benefit you financially.

As a source of revenue, Strava offers basic and premium subscriptions.

revenue segment

Segment: key resources

What resources support your business model? This segment addresses financial matters (accounts, securities), personnel (developers, designers, managers), material (offices, equipment), and information (software) resources — so-called strategic assets that are necessary for doing business.

You can Include into this segment a list of key resources related to the key activities of your business.

Intellectual property, based on your value proposals, is also a key resource and plays a decisive role in the success of your business.

best business model for app development

Segment: key activities

The key activity of your product is the action that the customer takes to achieve the value proposition. What actions does your app need to perform well? What plays a crucial role in your technical development strategy? For example, creating infrastructure is the key activity for a system such as Uber.

To find solutions to this question you can make better consulting, quality management, design, and web development.

Segment: cost

This is the time to ask what the cost of running the business is, including the cost of achieving the value proposition for users and providing key resources and partnerships.

The cost of running the business covers the cost of all segments of business activity, that is the entire business model canvas for an application. You must cover salaries for your team, insurance, software, content, and any additional costs. After you sum up all the costs and get the total price, you can add it to the canvas.

Remember that the pricing of your product is one of the fundamental elements of your business model, since the price is the main criterion for customers when choosing a product. When choosing your pricing tactics, take the advice of Steve Blank from his book .

Read more about How to Estimate the Cost of Mobile App Development?

The business model canvas for Strava includes business analysis, development, development support, marketing, and the cost of content writers as line items in the cost structure.

Cost structure

We begin to use the canvas

We’ve briefly looked at every segment of the classic business model canvas and gotten acquainted with the elements of each segment. Now you can begin working out each segment of the canvas using sticky notes on which you can write your hypotheses. Your next goal is to confirm or disprove these hypotheses by conducting tests with consumers. It isn’t critical if your initial assumptions turn out to be wrong. Use an iterative process to confirm all aspects of your mobile application. Obviously, the final canvas will differ from the initial structure.

In this article, we wanted to inspire you to create a unique mobile application. Remember what Steve Jobs said: From what I’ve come across, following my curiosity and intuition turned out to be priceless later. Enjoy the process of creating your product using the business model canvas. This powerful and universal tool will allow you to visualize all the information you need for mobile app development.

Without a working business model, you can’t create a startup. Your business model must be tested. Otherwise, you’ll lose money finding a relevant model. And how can you prove that your business model works? A unique product is the result of the combination of all elements of your model, namely the value that the product offers to customers, the profit formula, and key resources.

Creating and working out all the details of the canvas requires a lot of time, attention, effort, and nerves. Of course, you can use a business model canvas template, but is it enough? After all, you need to take into account all the important aspects of application development in order to monitor the overall picture of the process and to transform the classic canvas to reflect your project requirements.

At Mind Studios , we know that your business model is the wind and your canvas a powerful sail. With the right methods, we can guide your mobile application to success !

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9 Software Development Trends: Benefits and Use Cases

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8 Proven App Revenue Models for Your Mobile App

best business model for app development

It is very unlikely that developers create apps just because they have free time or they are nice people.

When starting business entrepreneurs think about the revenues they can make and what they should do to reach their financial targets.

The mobile market is undoubtedly attractive in terms of possible income. According to Statista , global mobile app revenues amounted to over 365 billion US dollars in 2018.

In 2019, apps are projected to generate 461.7 US dollars, and until 2023, this number is expected to increase 2.5 times up to 935.2 billion US dollars.

app revenue estimations

While the industry revenues are soaring, some developers are struggling to find the right approach to monetize their mobile apps.

In this blog post, we will look closer into the app revenue models and describe how to make money with apps.

What is App Revenue Model?

A revenue model is a framework for generating revenues. A revenue model defines the sources that generate income. It also identifies what value will be offered by the product, how much it will be worth, and who will pay for this value. 

In simple words, when we talk about app revenue models we implicate the ways and the sources through which the mobile app will make money.

The app revenue model is an integral part of a business concept (or business plan) – the document that should be created before going into the development stage.

The app revenue model will also be of top interest to investors if you decide to raise additional funding for your product or sell it. 

best business model for app development

Types of App Revenue Models

There are different types of app revenue models, and developers can utilize several of them within one app to maximize their income.

In-app Advertising

The in-app advertising market was valued at 66.78 billion US dollars in 2018 and is expected to reach 472.64 billion US dollars by 2027.

Out of 3.9 billion users of mobile devices globally, 51% access the internet through their smartphones only. 89% of the total time spent on their smartphones, people play games and use messaging and shopping apps. 

Integrating in-app advertising into the app revenue model means that the developer will get paid for serving ads within the app. To do that, a developer has to partner with an ad monetization platform and integrate their SDK (Software Development Kit) which is a piece of code that should be properly added to your app code.

Usually, this is not a complicated process as ad monetization companies provide detailed documentation and support in case of questions. 

To gain substantial revenues from in-app advertising, the app needs to have a significant number of active users who engage with an app regularly. So, before cooperating with any ad network it would be good to work towards increasing the user base.

Most Popular Solution Among App Revenue Models

There are several ad formats that can be served to users.

mobile ad formats

  • Banner ads are the most common advertising format. They look similar to what we see while browsing on our desktops but on mobile they look much smaller so the users don’t pay too much attention to them. However, they can be animated which usually distracts users’ attention and irritate them. Usually, banner ads are placed on top or at the bottom of an app page. 
  • Interstitial ads are full-screen ads that hover over the app page. They can be static or involve rich media. These ad formats have one of the highest eCPM rates and if placed properly will not annoy users. At the same, they will not be unnoticed by users. When an interstitial pops up, a user will need to interact with the ad unit either closing it or tapping on it. There are certain guidelines about where to place these types of ads. You can read more about best practices and interstitial ad examples in our previous blog post.
  • Video ads can also take up the whole screen. It is a short video about the product that usually includes the link to another website or a download link if an app is advertised. 
  • Rewarded videos are booming now, especially within mobile games. A rewarded video is a video ad that a user is asked to watch in exchange for some benefits such as extra coins, additional lives, new accessories, more time to spend within an app, etc. This is a great way to motivate users to spend more time in your app. These ads are not obtrusive as a user decides on his own whether to watch an ad or not. 
  • Native ads appear as a native part of an app. They blend into the app’s design and content and can be perceived as a part of the app. Sponsored posts on social networks (Facebook, Twitter, Instagram, etc.) are a good example of native ads. Native ads are also used by news platforms.

in-app ad example facebook

A good thing about in-app advertising as a revenue source is that the app remains free for users. On the other hand, it is important to keep the balance and not to annoy the users too much. 

In-App Purchases

In-app purchases allow users to buy some features, content or services within an app. They are quite a wide notion and include several types of revenue sources that can be utilized by developers.

  • Purchasing consumables and non-consumables. Consumables are items that can be purchased and used only once, for example, an additional life in the game, virtual money, accessories, etc. Once depleted, they cannot be used again. 

Non-consumables are premium features that don’t expire and can be used multiple times. An example can be an additional filter in a photo app.

  • Freemium model. Freemium apps are free to download and have two types of features: Basic ones that are free to use, and premium ones that the user needs to pay for. The goal is to give a user a possibility to try out and enjoy all the premium features hoping he/she will further pay for upgrading. Such apps usually provide a free trial period. While the target is to get as many users as possible to pay, it is important to set the right balance when choosing what is free and what users will have to pay for. 
  • Subscriptions. Subscriptions are often used by cloud storage platforms, audio and video streaming services, news resources, and magazines. When subscribed, a user will be charged a certain amount of money on a regular basis – monthly, quarterly, yearly, etc. It is also common to provide a trial period before getting users to subscribe. 

Some apps are based on non-renewing subscriptions and provide access to content or services for a limited period. This model is often used by seasonal sports apps that provide a season pass to streaming content.   

If an app developer offers in-app purchases, users should be informed about it. This information is displayed within the app listing in the app stores.

Data Monetization

Selling users’ data might not sound very nice and ethical at the very beginning but this is, in fact, a legal way of making money. In the end, you are not sharing any personal information – all the data is impersonated.

If your app collects some information that can be valuable to research institutions, marketers, product owners or other third parties, you can consider data monetization as a revenue source.

Typically, this can be information about users’ devices, network type, location, IP address, etc. Of course, users need to be aware that their data can be passed to third parties, so it is important to openly provide this information in documentation such as Privacy Policy and Terms of Services. 

In one of our previous blog posts, we talked about “ crowdfunding platforms if you have an idea for an app “as a way to get initial funding for your app. You will not be able to generate revenues from Kickstarter or similar platforms but it can become an option to get some extra income. 

Affiliate Marketing and Lead Generation

If you came to a point when you have a substantial base of engaged users, you may consider using affiliate marketing and lead generation models.

Affiliate marketing is about having ads of another product in your app and earning a commission each time your users tap on an ad and convert to a sale or lead. To make it work, you’ll need to have the same target audience with an app that you are advertising. 

Lead generation is about capturing the contact information of people who will tap on an ad and agree to provide their contact details.

There are lots of affiliate marketing networks and you are free to join as many of them as you wish to maximize your revenues. But like with ads, it is not very easy to forecast your income as users’ behavior is often unpredictable.

SMS and Email Marketing

If you want to promote your app’s seasonal sale or explain your B2B product in more detail, SMS and Email marketing can help you with that.

These tools will not become your main sources of revenue but they can help you boost your app and generate more sales. While emails allow being very descriptive, use lots of images and text, SMS are short and straight to the point.  

Sponsorships

Having a sponsor is not a common way to monetize your app but it is not that new.

Back in 2012, a sandwich chain Subway sponsored PrePlay, a predictive gaming app, during the Super Bowl XLVI, trying to engage with the football fans and grow its brand awareness. Marriot sponsored the launch of Gayot.com mobile app that showed restaurant reviews written by professionals. In such a way, Marriott was promoting its Rewards Chase Card to business travelers. 

The way you integrate a sponsor into your app depends on the product and the goals of the partner. Some simple options include placing the sponsor’s logo in different parts of the screen, provide special offers from the sponsor, showing sponsors’ ads, etc.

The majority of the apps in application stores are free to download.

free paid app percentages on google play and app store

However, there is an option to offer paid apps that require paying money to download an app. After the payment, a user gets an app with all the features available that can be used from multiple devices. 

With the paid app model, the revenue is strictly connected to new users downloading an app. To have stable revenues over time, developers need to spend much effort to grow a new user base.

Preferred Among App Review Models

To ensure good reviews, an app needs to be of high-quality, have outstanding features that are different and more advanced than competitors have and overall deliver an impressive user experience.  

With so many free apps available, it is not easy to make users pay for an app. Often, paid apps are offered by very well known brands or respected institutions that are famous as a non-app business. A new startup app that has not proven value to the users previously has big chances to fail their monetization efforts when replying on the paid app revenue models.    

Even with free apps, it is possible to generate revenues. It might take some time to find out which revenue source works best for your app. Most developers mix several approaches and try to create a balanced model that would work well for both users and app creators.

Schedule a demo with us for more insights and to boost your app growth .

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12 Business models for mobile applications

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The return on investment depends on the type of business models it is used on.

The articulation of mobile applications is constantly evolving , therefore it is important to be clear about the different business models that already exist, which can design and carry forward a business strategy that best suits our technological product. It is critical to know what kind of business is going to apply this strategy as this method is directly related to the promotional strategy . Furthermore the return on invest varies on the type of investment made, it could either be long-term or short- term.

mobile applications

Today we find several lines of business, which can be broadly divided into two distinct groups. On the one hand there are models that require prior financial expenditure to access the download, however it is declining because they often create some dissatisfaction with their location. The reason being, mobile applications cannot be tested until you have purchased app, this means expectations may be higher than what it really is. On the other hand we come across applications that are completely free, although some of these mobile applications introduce payments that grants you access to other parts or services of the game .

12 business models for mobile applications

The different business models that are found in the mobile applications market are as follows:

  • Brand: This model is widely used by companies. The intended purpose is to obtain a reputational benefit for instance, improve brand image. Therefore, the access and use of the application is completely free.
  • Service part: Many companies choose this type of business first. This is used for an application as part of a more comprehensive service that requires optimization and assisting users. This can be optional and free, hence higher revenues for the company.
  • Advertising: The download and use of the application is completely free, however the return on investment is recovered by introducing advertisement within the application.
  • In-app Purchases : This model is used as a combination with a free download of the application, adding the option to purchase specific features, virtual goods, disable advertising, digital content and so forth. By offering related services return on investment can be made. This model is common in gaming applications.
  • Information: This is found in mobile applications that collect data on users. Users also receive free rewards for giving their information as this material can be sold to other companies that are conducting research.
  •  E-commerce: Commercial transactions conducted electronically on the Internet and access is completely free.
  • Hearings: Access to this type of application is granted to all users. Its sole purpose is to build a large user base and later will be used for other reasons. A clear example of this business model would be Facebook.
  • Affiliation : The download of this is free, however the upside is you receive commission based on sale, for instance advertising other application on your app.
  • Subscriptions: Downloading this type of application will be based on the time of use, this means it can could weekly, monthly, quarterly, annually and so on.  The price of the application will vary, depending on how long the product is being offered.
  •  Low priced: The main purpose of this is sell as many downloads at a reduced price, usually the stipulated price is € 0.99. The return on this would be long however, there is always a risk of not retrieving anything.
  • High price: This type of model has a high risk; it would wise to use this method when you have a specific target audience. The fact that the price exists high is why this application would result to fewer users.  Therefore the price of the application should be based on the audience you are targeting.
  •  Without a clear business model: This system is used when the application is created in order to achieve personal satisfaction. Its purpose is satisfy the user, rather than making a profit from it. Many of these mobile applications can be found in the android market, since it is the most used operating system for beginners in the programming world.

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5 business models for apps

Blog_Modelos-de-negocio-apps

The development of mobile applications (apps) is becoming a huge business, and it is estimated that it will be a 70 billion dollar business in 2017. The work that involves the creation, development, launch and promotion of an app is more than a lot, so its monetization – in order to recover the initial investment – makes perfect sense. And how do you make money with an app? There are several business models to consider.

What business models exist for apps?

The business models that can be implemented in order to monetize a mobile application are diverse, but not always an easy choice for app producers. Among the most current and popular choices, the highlight goes to: advertising, selling the app itself, the services/features that can be purchased within the app (in-app purchases), subscription, transaction and reference commissions.

Advertising

When it comes to monetizing an app, the most popular business model of all is probably advertising. Why? Not only because of its easy implementation, but also because of its widespread acceptance by mobile application users.

A paid app, which means a simple app purchase, which occurs as a one-time payment, is another very common business model when considering the monetization of mobile applications. However, choosing this source of income significantly affects the number of mobile application downloads, because there is extremely high competition between free apps that offer similar services. Naturally, users tend to be very price sensitive and, as such, their choice usually goes to the free option.

In-app purchases

Because of the natural tendency that users have to download free apps, producers are also equally prone to make their apps available for free, allowing the purchase of additional features within the app (in-app purchases) later on, such as the option of removing advertisements.

Subscriptions

Another business model that also permits free apps is the subscription model. This model can have many variations in terms of implementation; however, it is usually applied as follows: a free version of the app is made available, but with reduced features. Then, the users are persuaded to subscribe to the full service through the recurring payment (monthly, quarterly, yearly, etc.) of a subscription. This specific type of model is known as freemium.

Transaction and reference commissions

Another source of income that apps can adopt is related to transaction and reference commissions for the sale of goods and services from other companies. What does this mean exactly? An app that facilitates an advantageous transaction between two users can bring a transaction fee to the app producer; at the end of a game, an invitation to download a similar game can bring a referral commission to the app producer.

How to choose the right business model for your app?

The choice of a business model for app monetization doesn’t have to be limited to only one of the existing options – the truth is that this business model can include a combination of several or even all options simultaneously. There's nothing like experimenting and discovering which one, or ones, can bring bigger and better results!

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Last updated on January 12th, 2024 at 10:43 am

Agile Methodologies: A Key to Successful Mobile App Development

In today’s ever-changing mobile app development landscape, customer requirements have been changing at lightning speed. In such cases, delivering a high-quality app that meets customers’ expectations becomes a major challenge. So, how to develop a user-friendly, high-performing app? The answer is Agile mobile app development.

According to a Zippia report, over 71 percent of U.S. companies use Agile development. This methodology offers a dynamic approach that differentiates it from traditional application development techniques. Agile development can help you build the highest quality software product with increased customer satisfaction. 

Unlike the conventional software development approach, Agile methodology embraces adaptability, flexibility, and a customer-centric approach that allows developers to quickly adjust to customers’ feedback and changing market demands. These features can help you deliver top-notch mobile applications on time and within budget.

In this article, we will explore how Agile development methodology works, its benefits, various Agile frameworks, best practices, and much more. 

Let’s get started.

Table of Contents

How does Agile mobile app development work?

How does Agile mobile app development work

The Agile mobile app development methodology includes six stages, often called Agile phases. Let’s look at each one of them. 

Phase 1: Requirement analysis

At this stage, the team identifies and analyzes the app requirements. They consider business goals, user needs, and current market trends. The development team involves all the stakeholders and takes their inputs regarding the app features, functionalities, and outcomes. This information serves as the foundation for subsequent app development phases. 

Phase 2: Design

In the design stage, the team creates a comprehensive design plan, including the app’s visual and functional aspects. It’s a critical phase that shapes the app’s look and functionality.

This phase involves the following key activities:

  • User interface (UI) design: This involves creating the visual elements and layout of the app, including screens, icons, buttons, and navigation.
  • User experience (UX) design: UX design provides a smooth and seamless user experience, ensuring the app is intuitive and efficient.
  • Technical design: The team also creates a design roadmap for the technical aspects of the app, including features, functionalities, system architecture, data models, APIs, and required third-party integrations.
  • Interaction design: The team focuses on defining how the users will interact with the app and how it will respond to user inputs.

Phase 3: Development

The development phase, also known as the “implementation phase,” is a critical stage in Agile mobile app development. The development phase is an iterative process divided into short cycles called sprints.

Each sprint lasts 2-4 weeks, focusing on specific features and functionalities defined during the design phase. The development phase also involves daily stand-up meetings, known as scrums, where the team members provide work updates. This helps identify and remove any bottlenecks to ensure the project progresses smoothly.

Phase 4: Testing

Testing is an integral part of the Agile mobile app development methodology. Testing starts from the early development stages and continues through each sprint. Agile methodology emphasizes automated testing to streamline the testing process.

The tests verify user experience, functionality, performance, and other critical aspects of the application. Regular testing ensures stability and functionality as new features are added.

The various tests involved in Agile methodology include:

  • Unit testing: Testing individual components separately to ensure they function correctly
  • Integration testing: Ensuring different modules or components interact smoothly
  • Functional testing: Verifying if the app functions as expected based on the requirements
  • Performance testing: Assessing the app’s performance (speed, responsiveness, and resource usage) under different conditions
  • Security testing: Identifying security vulnerabilities under different circumstances and ensuring data protection
  • Regression testing: Verifying existing features and functions aren’t affected due to upgrades or new changes

Phase 5: Deployment

The deployment phase involves releasing the app on various platforms for users to download and install. At this stage, the quality assurance team performs the final test to ensure the app is fully functional and performing as expected.

If any code defect or bug appears, the development team addresses it swiftly. User training, establishing the release schedule, and communication channels also occur during this stage. Once all these activities conclude, the app is released for production.

Phase 6: Review

The review phase starts once the application is deployed and available for users. This phase involves evaluating app performance and user feedback to identify the areas for improvement. The development team aims to enhance functionality and performance through effective reviews, ensuring the app meets user expectations. 

Why choose Agile methodology for mobile app development?

Why choose Agile methodology for mobile app development

From large enterprises to start-ups, almost every business uses Agile approach as it breaks down the mobile app development process into smaller and more manageable tasks. This approach enables the development team to quickly adapt to evolving market demands. Let’s look at the key reasons to adopt Agile development methodology.

Excellent product quality 

Faster time-to-market, lower cost of development, better flexibility to changes, better control , increased customer satisfaction.

Effective Agile frameworks for mobile app development

Effective Agile frameworks for mobile app development

Let’s explore some of the most popular and effective Agile frameworks for mobile app development.

Extreme programming (XP)

Adaptive project framework (apf).

7 Best practices for implementing Agile methodologies in mobile app development

7 Best practices for implementing Agile methodologies in mobile app development

To successfully implement Agile mobile app development, consider these top seven best practices.

Collaborate with the customer

Focus on teamwork, hold daily stand-up meetings , use burndown charts for sprints, establish a communication guideline, focus on user experience, test throughout the development process, conclusion .

Agile methodology has revolutionized the mobile app development process. From excellent product quality to customer satisfaction and faster time to market, the Agile development process offers many advantages. The iterative and collaborative approach in Agile development enables the development team to adapt to evolving customer requirements. 

With Agile methodology, developers can receive regular feedback for continuous improvement, resulting in superior quality apps that deliver an exceptional user experience.

Turing’s mobile app development services can help transform your applications. We offer world-class teams and industry experts that follow Agile methodology and use cutting-edge technologies to build next-gen apps, exceeding our client’s expectations. Partner with Turing and join 900+ Fortune 500 companies and fast-scaling startups that trust Turing.

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The Best App Pricing Models For Your Company

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Apps are becoming increasingly valuable to consumers, driving up mobile app revenue potential . This makes the market harder and harder to infiltrate, especially with evolving app monetization tactics.

Delivering an end product that is useful to users and keeps them engaged is the main focus and goal of any app. However, monetization strategies, including SaaS and various app pricing models , are crucial facets to consider within your business plan .

Pricing a digital product , especially a B2C app , should never be overlooked. It is essential to make a careful determination of the price, taking into account internal and external factors like target market, goals , competitor pricing , and economic trends.

This will help to build a profitable, successful, and scalable mobile app or digital product. A well-planned pricing strategy can have a positive impact on customer lifetime value and average revenue per user (ARPU) .

The business plan should include a comprehensive pricing strategy and potential revenue streams . It’s also essential to delve into consumer psychology and market segmentation . Overlooking this aspect of the process could impact your ROI (Return on Investment) negatively.

This article will explore how to choose the best pricing strategy for mobile app development services , which is one of the most pivotal and taxing steps in the development process for a mobile app.

What a large-scale enterprise and a start-up need in an app or B2B app development can differ greatly. The concept of the app, its user acquisition strategies , and its tiered pricing structures will also revolve around different considerations.

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  • Top 10 Business Models for Mobile Application Development

Shibi Satheesh

SEO Analyst

Today the world is running towards the mobile app for meeting all the needs and to run life. We are getting all the things and getting information about everything in a mobile application. That’s how the growth is. So, if you are going to start your mobile application you should plan well to make your business profit and to build a better business model. For building the best business model for mobile applications you must think about every aspect where your business can grow well. First the development methods and process of your app like customer needs, market trends, your customers for your service, feasible reports, etc. The technology is developing fast and you should be aware that your business models are following the new trends and you can execute the new one.

We know that the development of mobile apps is a big process that involves business and strategy, the development and launch of apps, and so on. The choosing of your business would be the risky one you should do properly, what business you can do and what business model you can choose it for is crucial. Your mobile app should be the most helping hand for your business. Find out the main things as an entrepreneur like

  • Your business goals
  • Your priorities in business
  • How you are showcasing the app
  • What are the services you are including
  • How you generate business
  • Customer support
  • How to develop your business further

By evaluating this you can choose the business model for your mobile app. Before that why you need a business model? In order to reach your product and service in the best way to appropriate customer, a business model can do it by more profitable. You can prioritize the business model and can work according to that. To earn money with your business app, you can consider many business model ideas where we can discuss here.

Some types and tips of Business models for Mobile applications

To monetize and figure out the successful business strategy and to generate the best revenue with startup apps you can follow many things. This industry is fully competitive and a lack of business model and ideas will fall down your development in the field. Many teams make the common critical mistake of focusing their attention on developing the app. Convert your theoretical plans to practical implementation with business models which helps to monetize your business and to reach your real users.

1. Using Freemium

One of the most effective methods you can choose in a business model. With a freemium app, you can give a limited version of your app for free to the user and make them to your customers with a full-featured version of your app for a price. Users will be impressed by the demonstration of your product app which empowers the quality so, customers will automatically fall for your full-fledged product features with money. While using this model concentrate to limit the product feature so they should anxiously wait to get full features. By making a subscription fee you get a constant number of users without tension. They will renew the pack and will continuously use the app. With one-off payments users will pay one-time cash and take it for permanently meanwhile more people will choose this method.

2. Paid Methods

With paid conditions, people can purchase the app and afterward download it. There will be no trial options, people should directly purchase by checking the app summary. In this way, you can generate profit but there may be chances of lacking customer satisfaction and keeping your app at rest by users. We can’t find their problems and to get their satisfaction in using our app.

3. Sponsorship and Advertising

This is for more focused entrepreneurs in business who have more monthly users. They can go for advertising and sponsorship. A large number of users will benefit from this method; they will always interact with your app. The money you spent on your Ad should be profitable by seeing more users and interacting with your app. By sponsoring the app product focus on AD which explains the app feature and is more user friendly. Optimize the Ad and conveying the best message to users to keep your app more used by the customers.

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4. Affiliate Marketing

One of the very popular business models in mobile applications , more frequently used by most entrepreneurs today. Affiliate marketing is the best channel to promote the products or businesses where other individuals earn small commissions in return. If your product or app is yours then you can market it to others by earning some profit. By creating more leads and sales commissions. If you have a product you can sell by an affiliated network you get a commission for every product by using the app to sell.

5. Addictive model

This method works by building an addictive app with in-app purchases. It has become a more popular app monetization model and it will work especially for mobile games. Most mobile game app entrepreneurs are sighted into the best potential of producing virtual goods and accessing through in-app purchases. The best advantages of this model are its versatility and scalability. For all success, you need an addictive app that allows users to increase their value in virtual goods apps. This is well to games and can also be applied to other apps as well.

6. Data selling

The best business model for android application which involves the sale of extensive data to interested Third parties. If your app can produce a large amount of data on consumer desires, then the data will be useful for other companies, and the goods are focused on customer’s wants and needs. so, the app can make money by selling this data. There are many apps that have been following this business model and making more money.

7. Video Ads

Visual representation is very impressive and most people are using it now. Visual ads play a major role in customer’s attraction where they are directly able to see about product apps. Through this business model, you can show your application Ad display. Your best video ad will help to buy users your app. Video Ads help to collaborate app developers with advertising companies to help in the display and production of video ads on their apps.

One of the profitable applications in a business model by targeting your audience. The people who love big-screen phones and tabs are concentrated more as an audience. With your business, you can charge monthly or yearly by using song apps, book apps, comic apps so on. You didn’t get third-party content for free but you to be licensed. But creating your own content creation will be more difficult to start with free sources like YouTube.

9. Promotion service

Nowadays promotion is the main priority for every business. It will be much more difficult running your business without promotion. A lot of promotional services are there and you can choose them to promote your app. It will show on social media and thereby customers come to know your app. The app ranking may increase due to this and more users will be engaged in your apps.

10. Email and SMS

It old one but sometimes it works. The B2B products can be explained well in detail via email and SMS. This will help you to make your business known to many people and can boost your app. This will help you in brand awareness and can make more leads. You can display images and documents in email and also in SMS with small images showcasing the point. Customers will contact and get to know your app by the same media. Try to target real customers who are closely related to your product or app.

App business model for profit-making                                 

By using any suitable business model for your mobile application you can strengthen your business and by generating more users. All business is moving towards the trends and competition is also high. To succeed in your own product a mobile app will help you and thereby promote it. It’s your turn to select the appropriate model to enhance the business. A lot of apps like Amazon , Netflix are making money by focusing on the business models. To get good value and review for an app you should be generating quality and good content through business models. The customer will compare your product with the competitor always at the time of purchasing. So make your mobile app best and the business model more useful to generate revenue.

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Step-by-Step Guide to Developing a Subscription-Based App

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Step-by-Step Guide to Developing a Subscription-Based App

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August 10, 2023

Table of content

The market for mobile apps has taken advantage of the times of social distancing and brought out a mass of innovations and new apps - both professionally and privately.

As users seek more personalized experiences and developers strive to ensure continuous value delivery, the seamless integration of subscription options presents a golden opportunity.

According to Statista , in 2027, people are expected to spend around $186 billion on mobile apps from the Apple App Store and Google Play. This is a big increase of over 50 percent compared to what consumers spent in total in 2022 on these two app platforms.

best business model for app development

Offering subscription models and tailored plans within your application has become a pivotal strategy for both user satisfaction and sustainable revenue generation. This article delves into the essential insights and steps necessary to successfully implement subscriptions and plans into your application.

Understanding the Subscription Business Model

A subscription is a set of benefits that users can receive for a specified period of time. For example, a user with a subscription can watch videos from the application without ads and in better quality.

You can have multiple subscriptions within the same app, either to represent different sets of benefits, or different tiers of a single set of benefits (for example, “Basic” and “Premium” plans).

Through base plans and offers, you can create multiple configurations for the same subscription product. For example, you can create an introductory offer for users who have never subscribed to your app. Similarly, you can create an upgrade offer for users who are already subscribed.

For a detailed overview of subscription products, base plans, and offers, see the documentation in the Play Console Help Center .

The subscription-based app model has emerged as a dynamic and versatile approach in the modern business landscape. This model offers customers ongoing access to a product or service in exchange for regular payments, fostering a more predictable and sustainable revenue stream for businesses. The allure of subscription services lies in their ability to cultivate strong customer relationships, as users become invested in the value and benefits offered over time. For consumers, subscriptions often translate to enhanced convenience, continuous updates, and personalized experiences tailored to their evolving needs. As this model continues to gain traction across various industries, its potential to foster long-term loyalty and financial stability for businesses while providing enduring value to customers remains a compelling proposition.

Subscription-based apps offer both benefits and drawbacks for your project. Unlock sustainable revenue streams by understanding how to implement subscription model seamlessly, integrating user-friendly payment systems and delivering compelling content to cultivate a loyal user base.

Benefits of Subscription-Based Apps For Your Project

For companies that create a subscription based app, it brings a steady and predictable stream of revenue, enabling them to plan and invest in continuous app improvements and updates. This model fosters stronger customer engagement as subscribers are more invested in the app's value, which can lead to increased user loyalty and longer-term relationships. Subscription-based apps often allow for a higher level of personalization and ongoing user support, enhancing the overall user experience.

Drawbacks of Subscription-Based Apps

However, there are drawbacks to consider. Some users might be hesitant to commit to recurring payments, which can lead to a smaller initial user base compared to one-time purchase apps. Implementing and maintaining a subscription system can be complex and require ongoing technical support. Additionally, the subscription based app model demands a consistent delivery of valuable content and features to justify the recurring payments, which could place pressure on your development team to continuously innovate. Striking the right balance between pricing and the perceived value of your app is also critical, as overpricing might deter potential subscribers, while underpricing could affect revenue generation.

If you are willing to create a subscription app, consider these benefits and drawbacks carefully to determine whether a subscription-based approach aligns with your project's goals and user base.

The Best Examples of Subscription Businesses

Subscription-based software examples showcase the versatility of this business model across various industries. Streaming services like Netflix and Spotify exemplify the entertainment sector's success with recurring payments, providing users access to vast libraries of movies, shows, and music. In the realm of productivity, Microsoft's Office 365 offers a suite of essential tools under a subscription umbrella, granting users continuous updates and cloud integration. Even creative endeavors benefit, as Adobe's Creative Cloud allows artists and designers to access a wide range of professional software applications through a subscription plan.

Some other subscription-based software examples:

  • Apple One offers a consolidated package featuring Apple's top six services (TV+, Music, Arcade, iCloud+, News+, and Fitness+), all available for a single monthly fee.
  • Amazon's Prime membership unlocks access to their extensive TV and movie content library, along with the convenience of their "Subscribe and Save" feature, which automates orders and deliveries on a predetermined schedule – think about having your essential items like toilet paper delivered automatically. ‍
  • Scribd , an e-book platform, presents subscribers with unlimited access to over 60 million documents, encompassing articles, books, and audiobooks, contributed by various authors. These resources can be downloaded onto the Scribd app for offline use, as long as the subscription remains active.

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Planning Your Subscription App

How to create a subscription-based app? Planning your app involves a strategic approach to navigating the intricacies of how to create a subscription app. This process begins with a thorough understanding of your target audience and their needs, ensuring that the subscription model aligns with the value your app offers. Market research helps identify competitors and trends, providing insights to differentiate your app. Determining pricing tiers, benefits, and features is pivotal in enticing potential subscribers. The app's user interface and experience should be designed intuitively, simplifying the subscription process and enhancing user engagement. Technical considerations, like integrating a secure payment gateway and backend management, play a critical role in seamless subscription management. Let’s consider in detail how to create a subscription app both on the iOS and Android operating systems.

Incorporating subscriptions and plans in the iOS app

An In-App subscription is an increasingly popular way to monetize a mobile app. It involves collecting periodic payments in exchange for premium content and extended services.

Choose the Right Subscription Model

First of all, carefully consider the most suitable subscription model for your application. Common options include auto-renewable subscriptions and non-renewing subscriptions. Auto-renewable subscriptions are ideal for providing continuous value, while non-renewing subscriptions are better suited for finite services or content access.

Auto-renewable subscriptions allow you to break away from Apple's usual 70/30 revenue split. Apple incentivizes apps offering ongoing value by increasing the developer's share to 85% starting from the second year of subscription. If a user cancels or switches to another subscription group within 60 days, the one-year mark is reset. So, make sure your subscription offers an experience your users will want to keep for the long run.

Set Up Non-Renewing Subscriptions on App Store Connect

  • From My Apps, select your app.
  • In the sidebar, click Subscriptions.
  • Scroll down to Non-Renewing Subscriptions, and click Manage.
  • Click the add button (+).
  • Enter a Reference Name and Product ID, then click Create.
  • Set a price and add localizations .
  • Click Save.

Set Up Auto-Renewable Subscriptions on App Store Connect

  • Log in to App Store Connect:
  • Go to https://appstoreconnect.apple.com and sign in with your Apple Developer account credentials.
  • Navigate to Your App:
  • Once logged in, you will see a list of your apps. Select the app for which you want to set up in-app purchases.
  • Access Features Section:
  • In the left-hand sidebar, click on "Subscriptions".
  • For Auto-Renewable Subscription, all subscriptions must be a part of a group. Users can only subscribe to one subscription in a group at a time but can change to another subscription in the same group.
  • Create a Subscription Group:
  • In the sidebar under Features, click Subscriptions.
  • Enter a reference name.
  • Click Create
  • Create an Additional Subscription Group if needed:
  • If you want to offer groups of subscriptions with varying subscription levels, you’ll need to create more than one subscription group. Users who buy subscriptions in multiple groups are billed separately for each subscription.
  • In the sidebar under features, click Subscriptions.
  • Read and acknowledge the warning by selecting the checkbox and clicking Next.
  • Enter the reference name for the new group.
  • Click Create.
  • Add subscription products:
  • In the Sidebar under features, click Subscriptions.
  • Click a subscription group name.
  • Click Create (or add button if you're adding a subscription to a group that already has existing subscriptions).
  • Enter a Reference Name that clearly indicates what in-app section this purchase will unlock.
  • Enter a unique Product ID, typically starting with the Bundle ID and appending a specific name for this purchasable item. Note the Product ID for future reference.
  • Once you've created your subscription product, you'll be taken to its information page to add more details.
  • Under Subscription Duration, choose a duration and click Save.
  • Under Subscription Prices, set a price.
  • Optionally, enable Family Sharing , and edit the subscription’s tax category .
  • Localize the subscription display name, description, and promotional image to support different languages and regions. This ensures your app appears professional and relevant to users worldwide.
  • Provide review notes for Apple's app review team in App Store Connect. Include relevant information about your subscription and its features to expedite the review process.

Integrate in-app purchases into your iOS app

  • Open your project in Xcode and select the correct target for your app.
  • Navigate to the project settings, and under the "Signing & Capabilities" tab, click the "+" button to add a new capability.
  • From the list of capabilities, select "In-App Purchase" and click "Add."
  • Import the StoreKit framework into your code to interact with the App Store:

Implement methods to fetch product information, make purchases, and process transactions. Your class should conform to the SKPaymentTransactionObserver protocol. For instance, you can create an IAPHelper that looks like this:

SKPaymentQueue : It's a queue managed by StoreKit where all transactions are held until they are processed, completed, or failed.

SKProduct : It represents a product that you have declared in iTunes Connect with all the necessary information, including pricing, localized title, description, and more.

SKPayment : It represents an intent to purchase a product. You create an SKPayment object with the corresponding SKProduct and add it to the SKPaymentQueue to initiate the purchase.

SKPaymentTransaction : It represents an event regarding a SKProduct purchase. You receive transaction updates through the

method in the SKPaymentTransactionObserver.

SKProductRequest : It's a request made to fetch information about SKProducts by providing their product IDs. It allows you to retrieve the necessary details about your products from the App Store.

SKProductResponse : It's the response obtained after making an SKProductRequest. It contains two lists:

  • products: Successfully fetched SKProducts are stored in this list.
  • invalidProductIdentifiers: It includes identifiers that fail to correlate to an SKProduct
  • after implementing IAPHelper adopt the IAPHelperDelegate protocol and implement the required delegate methods:
  • to handle the fetched products showing them to the user
  • to handle any error encountered during product fetching or purchase
  • to handle successful purchase

Call the fetchProducts() method of the delegate to fetch the available products.

When the user initiates a subscription process, call the purchase(product:) method.

If the purchase was successful iapHelperDidCompletePurchase will be called, where you can update UI granting access to premium content or unlocking features.

  • Transactions can happen outside your App. Say your user changes their subscription type in the system settings, or your deferred transaction was approved by the user’s parents, you won’t be able to tell unless you are expecting them.It’s important to add the observer at launch, in application(_:didFinishLaunchingWithOptions:), to ensure that it persists during all launches of your app, receives all payment queue notifications, and continues transactions that may initiate outside the app. This way you will make sure you won’t miss any event.

Validate the Receipt

To indicate that a user has purchased a product you need to perform receipt validation. There are two ways to verify a receipt’s authenticity:

  • Locally, on the device. Validating receipts locally requires code that reads and validates a binary file that Apple encodes and signs as a PKCS #7 container.
  • On your server with the App Store. Validating receipts with the App Store requires secure connections between your app and your server and between your server and the App Store.

Validating the receipt locally requires you to develop or use code to read and decode the receipt as a PKCS #7 container, as defined by RFC 2315 . The App Store encodes the payload of the container using Abstract Syntax Notation One (ASN.1), as defined by ITU-T X.690 . The payload contains a set of receipt attributes. Each receipt attribute contains a type, a version, and a value.

The App Store defines the structure of the payload with the following ASN.1 notation:

To validate the app receipt, perform the following tests in order:

  • Locate and load the app receipt from the app’s bundle. The class Bundle provides the location of the receipt with the property appStoreReceiptURL .
  • Decode the app receipt as a PKCS #7 container and verify that the chain of trust for the container’s signature traces back to Apple Inc. Root certificate, available from Apple PKI . Use the receipt_creation_date, identified as ASN.1 Field Type 12 , when validating the receipt signature.
  • Verify that the bundle identifier, identified as ASN.1 Field Type 2 , matches your app’s bundle identifier.
  • Verify that the version identifier string, identified as ASN.1 Field Type 3 , matches the version string in your app’s bundle.
  • Compute an SHA-1 hash for the device that installs the app and verify that it matches the receipt’s hash, identified as ASN.1 Field Type 5 .

The validation passes if all of the tests pass. If any test fails, the validation fails.

If your app receipt validation fails, respond to that failure as follows:

  • Don’t try to terminate the app. Without a validated receipt, assume the user doesn’t have access to premium content. Provide a user interface to gracefully handle this case and inform the user what they can do to get full access to your app’s features.
  • If the app receipt is missing or corrupt, use the SKReceiptRefreshRequest object to refresh the app receipt.
  • In the sandbox environment, if the app receipt is missing, assume the tester is a new customer and doesn’t have access to premium content.

Manage subscriptions

Users can manage their subscriptions in their account settings on the App Store, where they see all renewal options and subscription groups, and can choose to upgrade, crossgrade, or downgrade between subscriptions as often as they like. You can also use the showManageSubscriptions(in:) method to allow them to do this within your app. When someone makes a change in their subscription level, the timing of the change varies depending on what has happened:

  • Upgrade : If someone purchases a subscription offering a higher level of service than their current subscription, they are immediately upgraded. Additionally, they receive a refund of the prorated amount from their original subscription. To ensure users can access the upgraded content or features immediately, prioritize the subscription as an upgrade.
  • Downgrade : If a user selects a subscription with a lower level of service than their current subscription, the existing subscription continues until the next renewal date. At the next renewal, the subscription is renewed at the lower level and price. This approach provides a seamless transition for users.
  • Crossgrade : When a user switches to a new subscription of equivalent level, the timing of the change depends on the duration of the old and new subscriptions. If both subscriptions have the same duration, the new subscription begins immediately. However, if the durations differ, the new subscription goes into effect at the next renewal date.

Test Subscriptions in App Store Connect Sandbox

The free version of an Apple Developer account won't allow you to set up subscriptions. You will need a paid one. Additionally, testing must be conducted on a real device, as simulators do not offer support for subscriptions.

When testing subscriptions in a development build of an app, Apple provides a test environment that allows you to "purchase" your subscription products without creating financial transactions.

Creating a Sandbox User:

  • Open App Store Connect and navigate to "Users and Roles."
  • Click on the "Sandbox Testers" tab and then click the "+" button next to "Tester."
  • Provide a first and last name for the test user. Use a real email address, as Apple will send a verification email to this address.
  • Once you receive the verification email, click the link to verify the email address.
  • Ensure that the email address you use is not associated with an existing Apple ID account.

Preparing the Device for Testing:

  • On the device you'll be testing with, open the iOS Settings app and tap "iTunes & App Store."
  • Tap your Apple ID and then select "Sign Out."

Testing Subscriptions:

  • In your app, verify that users can select the desired subscription plan, initiate the purchase, and see the confirmation screen.
  • When prompted for payment, enter the username and password of the Sandbox account you created on App Store Connect.
  • Tap "Continue" and then "OK" on any following popups.
  • Ensure that the payment process completes successfully without any errors.

Understanding Subscription Renewals in Sandbox:

  • The Sandbox environment allows you to test subscription events like renewals, state changes, and interrupted purchases without waiting for the actual subscription duration.
  • After adding testers in Sandbox, you can choose a subscription renewal speed for each tester. By default, accounts are set to a speed equalization of 1 month = 5 minutes. However, you can adjust the renewal period to slow down or speed up the process.
  • Keep in mind that subscriptions can renew up to 12 times before auto-renewal turns off on the thirteenth renewal attempt.

When implementing subscriptions in your app, it is essential to follow best practices to ensure a successful and user-friendly experience. Avoid hardcoding product IDs and fetch them dynamically from your server to provide flexibility in offering various subscription options. Rely on Apple for subscription data such as prices and descriptions to facilitate changes without requiring app updates. Consider offering in-app subscription management options for upgrading, crossgrading, or downgrading, and include a deep link to Settings for easy subscription cancellation. Sometimes understanding how to make a subscription app is not enough. Clearly describe subscriptions to help users understand what they are purchasing and prevent confusion. When managing prices, take existing subscribers into account and decide whether to increase prices incrementally or only for new users. Lastly, adhere to Apple's guidelines for in-app purchases to ensure smooth implementation and compliance.

Implementing a premium subscription builds app with a profitable and scalable business model. By following these best practices, you can create a seamless and successful subscription model that attracts and retains subscribers.

Incorporating Subscriptions and Plans in the Android App

Use deep links to allow users to manage a subscription

As a developer, you must make it easy for your customers to manage their subscription. Your app should include a link on a settings or preferences screen that allows users to manage their subscriptions. An example of this link is shown in figure below:

best business model for app development

If the user has a non-expired subscription, you can direct them to a URL similar to the following, replacing "your-sub-product-id" and "your-app-package" with the subscription ID and app package info:

https://play.google.com/store/account/subscriptions?sku=your-sub-product-id&package=your-app-package

If a user doesn't have any non-expired subscriptions within your app, use the following URL to direct them to the page that shows all of their other subscriptions:

https://play.google.com/store/account/subscriptions

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Allow users to upgrade, downgrade, or change their subscription

Users should be able to upgrade or downgrade a subscription. When upgrading or downgrading a subscription, you can set the proration mode that determines how the change affects your subscribers.

The following table lists available proration modes:

  • IMMEDIATE_WITH_TIME_PRORATION
  • IMMEDIATE_AND_CHARGE_PRORATED_PRICE
  • IMMEDIATE_WITHOUT_PRORATION
  • IMMEDIATE_AND_CHARGE_FULL_PRICE

For a detailed overview of proration see the documentation in the Android Developers Docs .

Subscription setup

Google Play's billing system

Google Play's billing system is a service that enables you to sell digital products and content in your Android app. You can integrate Google Play's billing system with your Android app using the Play Billing Library .

You should also integrate Google Play's billing system with your server backend to create the necessary developer flows. This is essential to guarantee that your purchase management and cross-platform entitlements are efficient and secure.

Before integration, you need to create a developer account, and create and configure products in the Google Play Console .

For a detailed setup of a developer account, see how to setup a Google Play developer account .

Once you've set up a developer account, you must publish a version of your app that includes the Google Play Billing Library. This step is required to enable billing-related features in the Google Play Console, such as configuring the products you want to sell.

Add the Google Play Billing Library dependency to your app:

Once you've added the library to your app, build and publish your app.

After that, you can create and configure your products .

Subscription integration

Life of purchase

Here's a typical purchase flow for a one-time purchase or a subscription.

  • Show the user what they can buy.
  • Launch the purchase flow for the user to accept the purchase.
  • Verify the purchase on your server.
  • Give content to the user.
  • Acknowledge delivery of the content. For consumable products, consume the purchase so that the user can buy the item again.

Subscriptions automatically renew until they are canceled. A subscription can go through the following states:

  • Active: User is in good standing and has access to the subscription.
  • Cancelled: User has cancelled but still has access until expiration.
  • In grace period: User experienced a payment issue but still has access while Google is retrying the payment method.
  • On hold: User experienced a payment issue and no longer has access while Google is retrying the payment method.
  • Paused: User paused their access and does not have access until they resume.
  • Expired: User has cancelled and lost access to the subscription. The user is considered churned at expiration.

Initialize a BillingClient

Once you've added a dependency on the Google Play Billing Library, you need to initialize a BillingClient instance. Is the main interface for communication between the Google Play Billing Library and the rest of your app.

To create a BillingClient, use newBuilder() :

Connect to Google Play

After you have created a BillingClient, you need to establish a connection to Google Play.

To connect to Google Play, call startConnection():

Show products available to buy

After you have established a connection to Google Play, you are ready to query for your available products and display them to your users. Ensure your product display follows all Play policies .

To query for in-app product details, call queryProductDetailsAsync():

Use product ID and ProductType which were created in Google Play Console. The ProductType can be either ProductType.INAPP for one-time products or ProductType.SUBS for subscriptions.

Querying with Kotlin extensions

You also can query for in-app product details by calling the queryProductDetails() extension function.

Launch the purchase flow

To start a purchase request from your app, call the launchBillingFlow() method from your app's main thread:

On a successful call to launchBillingFlow(), the system displays the Google Play purchase screen:

best business model for app development

You must implement onPurchasesUpdated() to handle possible response codes:

Processing purchases

Once a user completes a purchase, your app then needs to process that purchase.

Your app should process a purchase in the following way:

  • Verify the purchase.
  • Give content to the user, and acknowledge delivery of the content.

To verify a purchase, first, check that the purchase state is PURCHASED.

After granting entitlement, your app must then acknowledge the purchase. This acknowledgment communicates to Google Play that you have granted entitlement for the purchase. If you don't acknowledge a purchase within three days, the user automatically receives a refund, and Google Play revokes the purchase.

The process to grant entitlement and acknowledge the purchase depends on whether the purchase is a consumable, non-consumable, or subscription.

Fetching purchases

To handle situations when your app could lose track or be unaware of purchases (such as Network Issues during the purchase, Multiple devices or Handling purchases made outside your app), be sure that your app calls BillingClient.queryPurchasesAsync() in your onResume() method to ensure that all purchases are successfully processed as described in processing purchases block.

queryPurchasesAsync() returns only active subscriptions and non-consumed one-time purchases.

queryPurchaseHistoryAsync() returns the most recent purchase made by the user for each product, even if that purchase is expired, canceled, or consumed.

This completes the integration. You can test the app as indicated in the documentation Test your Google Play Billing Library integration .

How many team members do you need to implement subscriptions into your app?

The number of team members required to effectively implement subscriptions into your app depends on the complexity of the project and the scale of your application. At a minimum, you would typically need a dedicated project manager, one or more software developers with experience in app development and backend systems, a UI/UX designer to create user-friendly subscription interfaces, and a product manager to align the subscription model with your app's overall strategy. Additionally, having a quality assurance specialist to thoroughly test the subscription features and ensure a seamless user experience is crucial. If your app has unique technical or design requirements, you might need to expand the team to include specialists in those areas.

We know how to make it faster, here’s why

Our estimations.

Axon takes pride in offering cutting-edge solutions and services underpinned by agile project management methodologies. We recognize the paramount significance of precise estimations in meeting client expectations and project deadlines.

Our approach to estimations revolves around close collaboration with our clients. We understand that every project is unique, and client preferences play a crucial role in defining the scope and scale of software development initiatives. By actively engaging with our clients, we gain deep insights into their specific requirements, priorities, and budgetary constraints. Leave your contacts , and we will provide you with estimations in 24 hours.

Our experience

At Axon , we have extensive expertise in seamlessly implementing subscriptions and plans into a wide range of applications.

With a track record of delivering solutions that combine innovation and functionality, Axon significantly contributes to the app's enhanced user experience and revenue potential through unparalleled expertise in subscription integration. If you have doubts about how to make a subscription app, we are here to help.

Throughout the software engineering process, our team has demonstrated a well-established track record of collaboration and professionalism when working with our esteemed partners.

Our team's agility enables us to embrace change and tackle complex challenges with confidence. We approach each project with a flexible mindset, tailoring our methodologies to suit the unique requirements and goals of our clients. Through agile project management, we ensure that our solutions are scalable, maintainable, and adaptable to future needs.

In conclusion, the integration of subscriptions and tailored plans into your application holds the potential to revolutionize user engagement, satisfaction, and revenue streams. Through careful consideration of the steps outlined in this blog post, coupled with collaboration with skilled professionals , you can navigate this dynamic landscape with confidence.

With this article, you’ve learned how to make a subscription-based app by strategically implementing user-friendly payment gateways and crafting compelling content, ensuring sustained revenue and a loyal user base.

Remember that successful implementation extends beyond technical prowess; it involves understanding your users' needs, crafting intuitive interfaces, and aligning your subscription strategy with your app's overarching mission. As technology and user preferences continue to evolve, the ability to offer flexible, value-driven subscription models will be a cornerstone of sustained success!

Software Development Team

When it comes to creating software solutions that not only meet but exceed your business objectives, partnering with a proven expert is paramount. That's where Axon , your trusted ally in software engineering, steps in. Our comprehensive services and dedicated team are here to streamline your development process, providing you with top-notch solutions while keeping a watchful eye on your budget.

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ChatGPT vs. Copilot: Which AI chatbot is better for you?

sabrina-ortiz

Since ChatGPT launched in November 2022, AI chatbots have been the talk of the internet. ChatGPT's abilities to generate text , talk conversationally, write code , and do so much more caused huge demand for the chatbot. 

Naturally, seeing ChatGPT's massive success, other companies rushed to compete in the generative AI space . 

Also: The best AI chatbots: ChatGPT and other noteworthy alternatives

Shortly after ChatGPT's launch, Microsoft announced the integration of AI into its Bing search engine , known at the time as Bing Chat, later renamed to Copilot . Despite being designed for the same purpose, Copilot has some major differences from ChatGPT, with the biggest difference being access to the entirety of the internet for free. 

So, which chatbot should you reach for? We compared ChatGPT (the free version) and Copilot to help make your decision easier. 

You should use ChatGPT if...

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1. You want to experience the hype for yourself

ChatGPT has been the leading AI chatbot since its launch and has served as the blueprint for the many AI chatbot spinoffs that have entered the space since. 

As a result, it has the most name recognition and popularity. The hype is well deserved. ChatGPT is a very capable chatbot that can provide insight and assistance on a wide variety of topics, including technical areas such as writing and coding . 

ChatGPT is currently free to use and open to everyone. Therefore, if you are curious about how an AI chatbot could benefit you, you might as well try the one that started the boom -- and find out what you like and need in a chatbot assistant. 

2. You want clarity on topics or events from before 2021 

ChatGPT was trained on the entirety of the web before 2021. Therefore, if you have any questions about topics or events that occurred before 2021, ChatGPT will be able to provide you with a thorough, conversational response that covers all of your questions.

Also: The best AI image generators to try right now

This ability can be especially useful when you need clarity on an established topic that you are learning or researching, such as a historical event or a scientific term. ChatGPT can thoroughly explain a topic the way a tutor would. The best part is that, unlike a tutor, ChatGPT is available at all times (except when it is at capacity) and is able to answer as many questions as you'd like.

Your input prompts are also not limited to standard search engine entries but can include specific math and coding prompts, and in that case, the chatbot's knowledge base isn't a factor. 

ChatGPT does offer a plug-in that allows it to search the internet for up-to-date information. However, that feature is limited to ChatGPT Plus , which costs $20 per month. Note, however, that Web searching in ChatGPT is powered by Bing (the search tool) and not Copilot (the generative AI). So when ChatGPT Plus needs to search the web, it uses Bing. 

3. You want long, in-depth responses 

In our testing experience, ChatGPT provides the most in-depth responses compared to competing chatbots, including Copilot.

For example, if you ask ChatGPT a loaded question such as "What is life?", the chatbot will provide you with several paragraphs explaining different aspects and interpretations of the concept. 

Also:   How to use ChatGPT to write Excel formulas

When you plug the same question into Microsoft's chatbot, you only get a four-sentence response:

Life is a complex concept with various definitions, but generally, it's recognized as a condition that distinguishes organisms from inorganic objects and dead organisms. It's characterized by the capacity for growth, reproduction, functional activity, and continual change preceding death. Life encompasses a variety of biological processes and phenomena, including metabolism, growth, adaptation, and response to stimuli. Philosophically, life can also refer to the experience of living, the vitality and vigor that animate beings exhibit.

In addition to answering questions more thoroughly than other chatbots, ChatGPT does not have a query cap, unlike Copilot, putting no limits on your curiosity. The query cap for Copilot is unclear and when you ask the chatbot itself it says, "While I can't provide the exact number as it may vary, it's designed to ensure conversations are productive and meaningful."

No matter how many follow-up questions you have, ChatGPT will answer them all with an in-depth response. 

You should use Copilot's AI-powered search if...

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1. You want information on current events for free

If you have any questions relating to current events, Copilot is your go-to chatbot. 

To generate an answer, Copilot indexes the entirety of the web. As a result, the chatbot has access to the latest events, stories, and research available at the very moment you ask your question. 

Also: What is Copilot? Here's everything you need to know

Like ChatGPT, Copilot will provide human-like, conversational responses to answer your questions. This skill can be especially helpful in answering questions about news going on right now. We've all heard something on the news that left us with follow-up questions -- and that's where Copilot can shine. 

As mentioned above, Copilot is also being used to power ChatGPT search , which gives it access to current events. However, access to this feature currently requires a paid subscription to ChatGPT Plus. For that reason, Copilot's AI-powered search remains the best chatbot to get information on current events. 

2. You want to confirm your sources 

A big concern with using ChatGPT is that you can't confirm the accuracy of its responses since it does not provide sources for its responses. 

OpenAI has admitted in the past that ChatGPT is prone to hallucinations and inaccurate responses as, after all, it is an AI model capable of making mistakes. Copilot attempts to solve that issue by providing sources. 

Also:  How to make ChatGPT provide sources and citations

When you ask a question in Copilot it will generate a response with footnotes that lead you back to the exact source from which it got its response. As soon as you click the footnote, you will be brought directly to the web article in another tab. 

This capability is especially useful when using the chatbot for tasks where accuracy is crucial, such as a workplace or academic deliverable, research, or simply facts for an informal conversation in which you want to be sure you know what you're talking about. 

Asking Copilot math-related questions will also present you with complex mathematical expressions and their markups. These equation visuals serve as sources for math as they clearly demonstrate the origin of the answer.

The citations feature is also now available on ChatGPT through the new Copilot integration. However, a paid ChatGPT Plus subscription is required. 

3. You want free access to OpenAI's latest model -- GPT-4

GPT-4  is the newest version of OpenAI's language model systems, more advanced and reliable than GPT-3.5, the large language model (LLM) upon which the free version of ChatGPT runs. 

Also:   7 ways you didn't know you can use AI chatbots

There are only two ways to access GPT-4: ChatGPT Plus , which costs $20/month, and Copilot, which is free. 

Therefore, if you want to see what OpenAI's latest model is about without paying for it, Copilot is your only option. The day OpenAI announced its latest language model, Microsoft revealed that, since its launch, Bing AI had been running on GPT-4. 

Alternatives to consider

Open to other AI chatbot prospects? There are plenty of other generative AI tools on the market that offer different strengths. Here are a few others you can try:

Artificial Intelligence

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What is Copilot (formerly Bing Chat)? Here's everything you need to know

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ChatGPT Enterprise vs. ChatGPT Team: Which is the best for your business?

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The best AI chatbots: ChatGPT and other noteworthy alternatives

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Google rebrands its AI services as Gemini, launches new app and subscription service

FILE - Alphabet CEO Sundar Pichai speaks about Google DeepMind at a Google I/O event in Mountain View, Calif., Wednesday, May 10, 2023. Google on Thursday, Feb. 7, 2024, introduced a free artificial intelligence app that will implant the technology on smartphones to enable people to quickly connect to a digital brain that can write for them, interpret what they're reading and seeing in addition to helping manage their lives. (AP Photo/Jeff Chiu, File)

FILE - Alphabet CEO Sundar Pichai speaks about Google DeepMind at a Google I/O event in Mountain View, Calif., Wednesday, May 10, 2023. Google on Thursday, Feb. 7, 2024, introduced a free artificial intelligence app that will implant the technology on smartphones to enable people to quickly connect to a digital brain that can write for them, interpret what they’re reading and seeing in addition to helping manage their lives. (AP Photo/Jeff Chiu, File)

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SAN FRANCISCO (AP) — Google on Thursday introduced a free artificial intelligence app that will enable people to rely on technology instead of their own brains to write, interpret what they’re reading and deal with a variety of other task in their lives.

With the advent of the Gemini app, named after an AI project unveiled late last year, Google will cast aside the Bard chatbot that it introduced a year ago in an effort to catch up with ChatGPT, the chatbot unleashed by the Microsoft-backed startup OpenAI in late 2022. Google is immediately releasing a standalone Gemini app for smartphones running on its Android software.

In a few weeks, Google will put Gemini’s features into its existing search app for iPhones, where Apple would prefer people rely on its Siri voice assistant for handling various tasks.

Although the Google voice assistant that has been available for years will stick around, company executives say they expect Gemini to become the main way users apply the technology to help them think, plan and create. It marks Google’s next foray down a new and potentially perilous avenue while remaining focused on its founding goal “to organize the world’s information and make it universally accessible and useful.”

File - People look at iPhone 15 phones at an announcement of new products in Cupertino, Calif., Tuesday, Sept. 12, 2023. On Thursday, Feb. 1, 2024, Apple will release its results for the holiday season against a backdrop of legal headaches, ongoing worries about a yearlong dip in revenue and intrigue surrounding the upcoming release of its hotly anticipated mixed-reality headset. (AP Photo/Jeff Chiu, File)

“We think this is one of the most profound ways we are going to advance our mission,” Sissie Hsiao, a Google general manager overseeing Gemini, told reporters ahead of Thursday’s announcement.

The Gemini app initially will be released in the U.S. in English before expanding to the Asia-Pacific region next week, with versions in Japanese and Korean.

Besides the free version of Gemini, Google will be selling an advanced service accessible through the new app for $20 a month. The Mountain View, California, company says it is such a sophisticated form of AI that will it be able to tutor students, provide computer programming tips to engineers, dream up ideas for projects, and then create the content for the suggestions a user likes best.

The Gemini Advanced option, which will be powered by an AI technology dubbed “Ultra 1.0,” will seek to build upon the nearly 100 million worldwide subscribers that Google says it has attracted so far — most of whom pay $2 to $10 per month for additional storage to back up photos, documents and other digital material. The Gemini Advanced subscription will include 2 terabytes of storage that Google currently sells for $10 per month, meaning the company believes the AI technology is worth an additional $10 per month.

Google is offering a free two-month trial of Gemini Advanced to encourage people to try it out.

The rollout of the Gemini apps underscores the building moment to bring more AI to smartphones — devices that accompany people everywhere — as part of a trend Google began last fall when it released its latest Pixel smartphones and Samsung embraced last month with its latest Galaxy smartphones.

It also is likely to escalate the high-stakes AI showdown pitting Google against Microsoft, two of the world’s most powerful companies jockeying to get the upper hand with a technology that could reshape work, entertainment and perhaps humanity itself. The battle already has contributed to a $2 trillion increase in the combined market value of Microsoft and Google’s corporate parent, Alphabet Inc., since the end of 2022.

In a blog post , Google CEO Sundar Puchai predicted the technology underlying Gemini Advanced will be able to outthink even the smartest people when tackling many complex topics.

“Ultra 1.0 is the first to outperform human experts on (massive multitask language understanding), which uses a combination of 57 subjects — including math, physics, history, law, medicine and ethics — to test knowledge and problem-solving abilities,” Pichai wrote.

But Microsoft CEO Satya Nadella made a point Wednesday of touting the capabilities of the ChatGPT-4 chatbot — a product released nearly a year ago after being trained by OpenAI on large-language models, or LLMs.

“We have the best model, today even,” Nadella asserted during an event in Mumbai, India. He then seemingly anticipated Gemini’s next-generation release, adding, “We’re waiting for the competition to arrive. It’ll arrive, I’m sure. But the fact is, that we have the most leading LLM out there.”

The introduction of increasingly sophisticated AI is amplifying fears that the technology will malfunction and misbehave on its own, or be manipulated by people for sinister purposes such as spreading misinformation in politics or to torment their enemies. That potential has already led to the passage of rules designed to police the use of AI in Europe , and spurred similar efforts in the U.S. and other countries.

Google says the next generation of Gemini products have undergone extensive testing to ensure they are safe and were built to adhere to its AI principles , which include being socially beneficial, avoiding unfair biases and being accountable to people.

best business model for app development

best business model for app development

Get started with Microsoft Copilot with Graph-grounded chat

Microsoft Copilot with Graph-grounded chat (previously named Microsoft 365 Chat) combines the power of artificial intelligence (AI) with your work data and apps to help you unleash creativity, unlock productivity, and uplevel skills in a chat experience. 

Like your average AI chat app, Microsoft Copilot can find information on the web and write poems, but with the added value of being able to incorporate your work content, such as chats, emails, and files to help you draft content, catch up on what you might have missed, and get answers to specific work questions. 

Ready to try it out? Let's get started!

How to open Microsoft Copilot with Graph-grounded chat

You can access the chat experience in Microsoft Copilot in several ways:

Use it in desktop and mobile versions of Microsoft Teams . See Use Microsoft Copilot in Teams.

Launch the experience at Microsoft Bing ( Bing.com/chat ). See  Use Microsoft Copilot at Bing.com .

Access it at Microsoft365.com . See Use Microsoft Copilot at Microsoft365.com .

What to do with Microsoft Copilot with Graph-grounded chat

Here are a few things you can do with the chat experience in Microsoft Copilot:

Catch up on things . Microsoft Copilot can synthesize and summarize large amounts of data into simple, easy-to-digest summaries. See Catch up on things quickly with Microsoft Copilot .

Create content and brainstorm . Microsoft Copilot can help you brainstorm ideas and draft new content based on anything from a storyboard or a script to an agenda or an executive summary. See Create content with Microsoft Copilot .

Get quick answers . Microsoft Copilot enables you to act as your own personal search engine. Ask questions about specific files and messages, or find information you know is out there, but you can't remember where it's stored. See Ask questions and get answers with Microsoft Copilot .

Prompt and iterate

The keys to unlocking as much value as possible are writing great prompts and embracing iteration. A prompt is the set of instructions that you use to tell Copilot what you want. We find that the best prompts for Copilot include some combination of goals, context, details, and/or data.

Goal : What do you want Copilot to do? I want a list of 3-5 bullet points to prepare me...

Context : What's the context in which you're trying to achieve an objective? ...for an update to my manager.

Details : What do you want the response to look like? Respond with headers for each point and enough detail to provide context...

Data : What data sources should Copilot focus on? ...and focus on Word docs and email over the last five days.

Tip:  When you’re giving Copilot instructions, you can direct it to specific work content by using the forward slash key (“/”), then typing the name of a file, person, or meeting.  If you write a prompt and don’t reference a specific file, person, or meeting, Copilot will determine the best source of data for its response, including all your work content.

The power of Copilot is often not unearthed with one perfect prompt, but rather, with a little back-and-forth conversation. Did it get close the first time, but focus on the wrong time period? Did it give you a big block of text when you wanted a numbered list? Copilot is a multi-turn experience, so just follow up with another prompt, and Copilot builds on its initial response to get closer to what you’re looking for. 

How does Microsoft Copilot with Graph-grounded chat differ from Copilot in Microsoft 365 Apps?

Microsoft Copilot with Graph-grounded chat works across multiple apps and content, giving you the power of AI together with your secure work data. Its ability to synthesize information and create things from multiple sources at once empowers you to tackle broader goals and objectives.

On the other hand, Copilot in Microsoft 365 Apps (such as Word or PowerPoint) is specifically orchestrated to help you within that app. For example, Copilot in Word is designed to help you better draft, edit, and consume content. In PowerPoint, it’s there to help you create better presentations.

Help shape the future of AI

AI is exciting new technology, but it’s still early in development and we’re continuing to learn. Sometimes Copilot gets things wrong, so it’s important to check the content that it generates.

Give us your feedback! Please use the thumbs-up and thumbs-down buttons to tell us what you like (or don't like), anything that Copilot gets wrong, or what we can do to improve your experience.

Unleash your productivity with AI and Microsoft Copilot

Frequently asked questions about Microsoft Copilot

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