Pros and Cons of Free and Paid Mobile Apps
Published at February 17, 2023

Free app or paid app that would succeed your mobile application? Well, the success of your mobile application depends on the app monetisation model strategy you choose.

Whether you have built a premium or free-to-install app, it's important to have an effective app monetisation plan that pleases your consumers while assuring the success of your business.

The market for mobile applications was estimated to be worth $106.27 billion globally in 2018, and it is anticipated to increase to $407.31 billion by 2026, with a CAGR of 18.4% between 2019 and 2026, according to Allied Market Research.

According to Statista, 96.8% of Android apps and 94% of iOS apps will be free in 2022. Hence, even though charging consumers to download your programme is a simple means of monetisation, freemium rivals will present fierce competition.

For this reason, it is advised for the majority of developers that your app is free to download and paid monetisation strategies are introduced after installation to earn profit.

However, how can free and paid apps become common for monetising apps? To answer these questions. Let’s take a look at the definition of the free app and paid app, along with the pros and cons of the free and paid apps below.

What is a Free App?

A free app is an app that is free and doesn’t charge you anything to install. There is essentially no download limit for free apps that are available in the Google Play Store and Apple Apps Store. The user is not experiencing any difficulties. They can immediately download your app, give it a try, and decide if they like it. In general, more people download free apps than paid apps.

Free apps make it simpler to attract a huge number of new users, which is related to the previous point. Having a large user base for any app is definitely beneficial, but this is especially true for network-based apps.

To dive in about a paid app strategy that is common for monetisation apps, know more about the pros and cons of using a free and paid app strategy according to Appypie below:

Pros of using a Free App strategy

1. No risk expectations

The user assumes no risk because the mobile apps are free to download. Without having to consider the app's value, they are more likely to download it. If they don't like what's within, they can always uninstall it. Hence, the possibility of conversion increases as the number of downloads.

2. Minimum standards

Users' expectations for free apps are substantially lower than those for paid or premium apps. There are minimum standards that users thought will become at risk by little apps because they do not give more expectations. The likelihood of negative ratings and reviews is lower among users of free apps.

3. High visibility

Since freemium apps are the most popular category on both of the top app stores, your free app will have a lot of visibility there. As a result, more users are likely to download the app, and more sponsors, marketers, and advertisers are likely to pay attention to it.

4. More downloads

Free apps should naturally get more downloads because they have a lower usage barrier and are highly visible on app stores. After all, one of the most significant indicators for measuring the performance of your app.

Cons using a Free App strategy

1. High competition

You are just one in a million other free apps competing for your client's attention. Many companies offer free apps with unique benefits for users. Hence, it’s important to realise the high competition you find for a free app strategy.

2. Depend on a third party

In order to maintain revenue and profit statistics, free software must significantly rely on outside sources. You would have to rely on other people for marketing and ad revenue in addition to your consumers' willingness to upgrade or subscribe.

3. Uncertainty of profit

The amount of profit you make from a free app relies on whether or not users pay for the premium version. For each app download, you do not receive a certain amount of money.

4. Absence of loyalty

Your app was provided without charge to users. It is likely that users merely downloaded it on a whim, may not actually use it, and may even uninstall it right away. When your app is offered for free, it is challenging to build a dedicated user base.

What is a Paid App?

According to Applovin, paid apps are those that a user pays a one-time price to download. These apps are frequently paid for and most likely don't include adverts.

Paid applications are actually quite popular and unique due to what they have to offer in specific markets, such as gaming, education, etc.

Ensure that you set the appropriate app pricing and that the relevant audience is attracted to your premium app. While being a less common option, this one does have a sizable and profitable market of its own.

Users of apps will be content to pay for the apps they want to download if they offer the correct advantages, features, and experiences. Hence, paid apps are popular based on what the apps offer users.

Pros of using a Paid App strategy

1. Defined user base

People won't just download your app on a whim and uninstall it later since they must pay to download it. Every user of your app will be genuinely interested in what you have to offer.

2. Certain profit

There is less uncertainty regarding the profit you will make for each install because all of your app customers will have to spend a specific amount of money to download your paid app.

3. Measurable stats

In the case of a paid app, the analytics are simpler to track because the app traffic is more consistent and organised. With improved efficiency and accuracy, you can measure KPIs like impressions, traffic, revenue, transactions, CLV (Customer Lifetime Value), and more.

4. Improved engagement

The cost of downloading your app is paid for by the consumer. Thus, their primary goal is to get the most out of their investment. Instead of just downloading it and putting it on the back burner until they clean their device, paid app users will be more engaged with your app and use it more frequently.

Cons of using a Paid App strategy

1. High expectations

The app users have higher expectations as a result when you tag your app. If you want positive reviews on the app stores, make sure you offer superior features, high-quality content, and customer support.

2. Less Download

There will always be fewer users of paid apps than free ones, regardless of how low you price your software. As a result, even if you receive high-quality downloads, there could not be a significant quantity to brag about.

3. Limited profit

There are restrictions when it comes to optimising the earning potential of a premium app, even though a fixed revenue is initially promised. For example, a purchased app cannot display advertisements. Further, your app users will demand more sophisticated features or increased scalability as soon as you raise the membership fees.

4. Additional design cost

The coding, along with the build quality and everything else involved in producing the app, may be challenging and time-consuming. However, creating such a paid app can be costly and need a sizable budget.

Wrapping Up

Choosing a free or paid mobile app monetisation would determine your business profit and your brand. It would be better to start with free applications if your business is just getting off the ground because they can help you define your market and niche.

Further, you can consider developing a paid app once you have expanded your consumer base and reach and are sufficiently confident. However, there is nothing to lose if you give it a try.

Whatever choice you make for monetising your app, VirtualSpirit is here to help you build the app that you want. Book a call now, and our experts will be there to help you.

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