The Successful Models For Selling Apps At The Apple (AAPL) App Store
The Apple (AAPL) App Store, with over 1.5 billion application downloads, has become a tremendous market where software developers can sell their products. Individuals or corporations must register with Apple and pay a small fee to become official developers in order to be able to sell applications at the Apple App Store. Apple has to approve each application prior to release. More than 10,000 developers have registered with the Apple App Store and have produced over 65,000 applications.
Apple benefits from maintaining an App Store in two ways. First, it dramatically increases the versatility and desirability of iPhones and iTouches. People can effectively customize their iTouches and iPhones by downloading the applications that complement their lifestyle. Apple also profits directly from the sale of paid applications. Apple takes a third of the price every time a user downloads an application that they have to pay for and the developer gets the rest.
Applications at the App Store fall into two categories: paid and free. The winning formula for paid apps is not complicated from a developer’s standpoint: create a great product and price it right. The creation of a successful application is still no easy feat. The Apple App Store maintains a list of the top 100 most downloaded applications. This is often the first place users go to shop for apps. The apps on the top 100 have incredible momentum so it is often very difficult for new developers to muscle their way onto the list.
The model is less straight forward for free applications. There are number of ways that developers seek to profit from offering free applications at the App Store. 24/7 Wall St. has chosen four software developers that have released products that have been among the top 100 most downloaded free applications at the App Store. Each of them seeks to profit by offering free applications in a different way.[via 24/7 Wall Street]
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