Pricing Your Application

So you have created an APK file and you’re a registered Android developer. Now you’re ready to put your app into users’ hands. (Finally!) But you must answer one last question — is your app a free app or a paid app?

Make this decision before you release your app, because its price has psychological consequences for potential customers or users and monetary consequences for you. If yours is a paid application, you have to determine your price point. Only you can make this decision, so inspect similar applications in the Play Store, and their price points, to determine your pricing strategy. Because the majority of apps are priced between $0.99 and $9.99, you rarely see one priced beyond the $10 threshold. Keeping the pricing of your app competitive with your product is a game of economics that you have to play to determine what works for your application.

The paid-versus-free discussion is an evergreen debate, and both sides are profitable. You only have to figure out what works best for your application, given your situation.

Choosing the paid model

If you choose the paid model for your app, you generally start seeing money in your pocket within 24 hours of the first sale (barring holidays and weekends). However, your paid application probably won’t receive many active installs.

Users who download your app from the Google Play Store get a free, 15-minute trial period to try out your paid application. During the trial period, users can experiment with the fully functional application, and if they don’t like it, simply uninstall it for a full refund. The trial period is extremely useful because users aren’t penalized for taking your app for a brief test-drive.

Choosing the free model

If you choose to take the free route, users can install the application for free. Between 50 and 80 percent of the users who install your free app will keep the application on the device; the others will uninstall it. The elephant in the room now is the question of how to make money by creating free apps.

As the age-old saying goes, nothing in life is free, and the saying applies to making money on free apps. You have two basic options:

In-app purchases: You identify different “upgrades” that users can buy when using your app, which are then managed via the Google Play Store.

Advertising: Various mobile advertising agencies provide third-party libraries to display ads on your mobile application.

The top mobile advertising companies are Google AdSense (www.google.com/adsense ) and AdMob (www.admob.com ). Obtaining a free account from one of these companies is fairly straightforward. They offer useful SDKs and walk you through the steps to run ads on your native Android applications. Most of them pay on a net-60-day cycle, so you may have to wait a few months to receive your first check.