The Art of the App Store: The Business of Apple Development

CONSIDERING RISKS AND REWARDS

Chapter 6 provided an overview of potential risks and rewards, but it bears going into more detail here regarding what you can expect when creating each type of free app.

Free Apps

Following are some considerations for risks and rewards with free apps:

• Ads are unpredictable — By themselves, ads may serve as a motivator to upgrade to a full version just to remove them. As mentioned previously, the conversion rate usually isn't very high, but when coupled with new content incentives, this can be part of an effective conversion plan. When coupled with the unpredictable revenue generated from using various types of ad networks, this makes it risky to consider free apps if there is no other strategy.
• Cross-selling other apps is rewarding — Regardless of your revenue strategy, use a free app as an opportunity to cross-sell your other apps, whether free or paid. This can pay off in terms of both brand awareness and direct downloads.
• Expect a slow building of revenue — Because your app isn't paid, unless it is phenomenally received and supported by ads, you can expect very little revenue in the initial months.
• Less risky because of lower cost — Because purely free apps are mostly lighter in content, features, and/or scope, they should generally cost less to make. An exception is if you build a system where both purely free and paid apps have the same functionality, but in the paid versions, content is licensed/trademarked, or otherwise offers more premium ...