12 Business models for mobile applications

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.

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.