Develops mobile app worth the cost?

Aaron Maxwell is the founder of mobile Web design agency mobile Web up. You can find it at the Agency's mobile business blog where he writes about mobile and social media.

Almost every business is preparing their mobile strategy. No secret why: mobile really take off. Already there are more people on the planet that are associated with text messaging than with email and more people who own phones than credit cards, according to recent statistics.

The difficulty is that there are many facets of mobile technologies. SMS Apps, websites, and provide a broad framework. But mobile payments and advertising are rich topic on their own. Where you focus first?

For many companies, the answer was "iPhone application" (notice I said iPhone app, mobile APP. more on that later). But people also searched in optimized mobile websites. This led to a debate in some quarters about which is more important. If you're going to do only one thing better make mobile application or mobile website?

Apps have one distinct advantage. Generally well-made app can provide the user experience much better than even the best mobile websites can right now. Don't think this is debatable.

Really though, I often see missing from these discussions is the cost. This is often not that difficult to do in a Web application that will work well on most smartphones (depending on the nature of the app — things like graphically rich games being an exception, etc.).

But making just a native iPhone application is usually more complex than do equivalent cross platform Web applications. And if you want Android and BlackBerry to give users the ability to have a native app, too, you have to frequently build each platform from scratch.

Application types

Let's make an important distinction here. Can be divided into Apps:

Those that are directly designed to generate income, andThose constructed for purposes of marketing, branding and customer service.

The first type is the theme of all these touching stories about some enterprising developer to create an iPhone app in my spare time, from which he makes more than enough to quit his job, coding TPS report generator at BoringBigCo. There is also a real companies create and sell apps, quite successfully. Income comes from fees app directly in app purchases and subscriptions, or less directly, through advertising (think angry birds on Android).

If you charge for your mobile product, native app. way to go mobile Web site cannot integrate with iTunes billing, which, in addition to providing a ready market mobile users 125 million — pays a snap. Charging for access to the WAP site will require rolling your own payment solution ... tough on mobile phone right now.

Although interesting and exciting, this category of mobile applications is not quite what we say in this article. Important when companies produce apps in the second category, for the purposes of marketing, branding and customer service. Good examples are Starbucks or target storage apps.

This is usually free, since the whole point is to get them distributed as widely as possible. And completely changes the discussion. If we make a app, how many prospects and customers reach? That puts a ceiling on the potential success of the app as a marketing channel.

Coverage of the different mobile channels

Through the prism of purely "how many perspectives can be achieved is the best tool of mobile marketing is text messaging. About 68% of u.s. cell phone subscribers are sent a text message at the end of 2010, according to a report by comScore in the mobile market share.

Of course you can do things with applications and websites that you can't do with SMS. Because many people can you reach with app? And how many from a WAP site?

For mobile Web sites is easy. The best indicator is how many people actually on the Internet on their mobile phones. At the end of 2010 is now over 36% of all mobile phone subscribers in United States. So as you are about half the number of people can reach a text message.

There's more to the story for your applications. I was in San Francisco's de Young Museum a couple weeks ago. They threw a little fun to celebrate the release of their mobile applications.

Only hitch: you could only install it if you have an iPhone. Those of us with androids and BlackBerrys couldn't play. This reflects the current reality with apps. IPhone app only works on, well, iPhones. Your application must be made separately for each platform.

North America's major smartphone platforms right now are the iOS, Android and BlackBerry. How many mobile users are in each? Here are the ratios, in the United States, as a percentage of all mobile phone users in the last quarter of 2010:

iPhone: 6.75% Android: 7.75 per BlackBerry: 8.53% of TOTAL: 23.0

In other words if you decide to make an iPhone app, only less than 7% of all mobile phone users will be able to use it. If the main purpose of the app is marketing, you need to decide whether the coverage is big enough to be worth it.

And if you are developing three different applications for the three most common platforms, you are going to potentially triple your charges. All so you can reach only a small proportion of the number of people you can get from a WAP site.

To make things worse, I'm ignoring Windows 7 phone. After a year, now it can have very substantial market share, thanks to Microsoft in a joint venture with Nokia. Most mobile Web sites will work fine on the new Nokia phones/WP7 the day they are released. But creating and pushing of mobile applications Silverlight is no small task.

Apps no longer free

Costs can add up. No such thing as a "typical" application, so it is difficult to provide meaningful average cost. But as a shared working shape, we can say it's worth at least $ 30.000 to develop, implement and deploy brand quality iPhone app. I found no published studies of equivalent expenditure for Android and BlackBerry, but because the device fragmentation anymore, it would make sense that costs at least similar.

All the above means that, at the end of the day, create a set of Mobile native apps that achieved, say, 80% of smartphone users will be much more expensive than creating mobile Web app reaches 90 percent of smartphone users. I don't even want to double value; I mean more like five, maybe even ten times more expensive.

In many situations, it is acceptable. As noted, sometimes you want to do things that simply aren't possible with WAP site, at least with good quality. Or may be possible but you know you can create something better with the native app, so the results more interesting. For enterprise-scale organizations like consumer banks and national retail stores they have the capital and ROI justifies it. But if your budget for mobile devices under $ 100000, it can't be a good approach.

How to: map a mobile website cost? I haven't found any published a study of typical costs for mobile Web design and development. But from my experience running a company that does exactly what I can tell you that it is almost always less than $ 30.000 for the "average" iPhone app.

What is the ROI?

Given all that, how many prospects of venture will reach per dollar? A conservative estimate 234 million adults United States with mobile phones, here's the breakdown: