Consumers may have downloaded upwards of three billion Apps for their smartphones, but there is a limit to what they will pay.
According to a survey of 400 smartphone users conducted by Asknet, nearly half of the respondents (45%) said they had never bought an application or software for their smartphones (34% said they hadn't done so because it "wasn't worth the time or the effort"). Of those who did purchase apps, 87% said they spent less than $50 in a year on them, while only 4% said they spent more than $100.
Of those who bought apps for their phones, 61% bought music, while 41% bought games, 35% bought ringtones, 33% bought news, 29% bought GPS/location-based software and 27% bought business applications within the past year. However, when asked what they would like to buy more of, 63% said music, while 51% said business applications, 48% said GPS/location services and 37% said games.
Meanwhile, more than a third of the survey respondents (38%) said they were frustrated with the cost of certain applications. At the same time, 29% said they were uncomfortable entering their credit card details to purchase them.
"The mobile area is still developing. Pricing is still an issue and the consumer is still in the process of pronouncing himself," Aston Fallen, president of Asknet, tells Marketing Daily. "The payment element is and will remain an issue."
Not all app purchasing follows the same process, of course. Apple's App Store, for instance, uses a similar interface to its iTunes software, which may account for Apple's enormous success in selling apps, while other companies have struggled to gain the same foothold. "There's an element of trust that goes along with that product," Fallen says. "The target market is more secure in that environment. Part of what is preventing others' level of success of Apple is that [lack of] familiarity."