Pallid statistics states that sales of desktop and notebook PC slow down. That is the main concern of hardware and software manufacturers as with the development of new technologies, mobile apps and cloud-based software-as-a-service apps replace them in the market.
Still manufacturers of the software have to use some valid business models, as there is a huge problem in the app market – the cost of the app is so low that it is cheaper than a can of soda.
In the past manufacturers could sell packaged software ranging between $49 to $395 ($87 to about $700 if to take inflation to consideration). However, today people do not buy packaged software (the only exception is PC and console games). At the moment even the biggest manufacturers like Adobe or Microsoft sell the app-level software through subscription services.
With the development of Android and iOS the prices for packaged software reduced a lot and the app store business model also plays a great role in it. In the past, developers of the software had to discount software 60-70% for sale to distributors. Today app stores take only 30% so the vendors have the rest of the price. However, the price of the software in the app stores reduces so much that it costs almost nothing. Moreover, according to the reports made by researchers, two thirds of smartphone owners nerve download apps, and almost a half of all apps are downloaded by 7% of smartphone owners.
As a result, user today can by 10 applications for less than $25 – and 10 years ago it was not possible to buy a single app for this price.
SaaS-based products have a different model of selling. Let’s face this, no matter how improved are the platforms for software development, it still requires expenses. On the one hand, there is no physical production cost risk today, as there are no disks, printings, whatsoever required for packaged software.
Still, the necessity to support the app appeared and the vendors started to use forums and FAQs as a means of online support.
One of the benefits of app stores is that Apple and Google regularly pay for app store sales and packaged software retailers didn’t.