4 Steps to Making Money as an Android Developer (Yes, it is possible.)

There was an interesting post the other day on Google and Blog entitled Making Money in the Android Market. (If you follow us on Twitter (@apsalarinc), you may have already read the article.) In sum, the blogger laments the shortsightedness of some Android developers who see fit to flood the market with inane apps (about which they themselves don’t even care), forsaking a chance at a greater payoff over time for the ease of a quick buck. One developer questions how to be expected to make a living through ad revenue alone.

To the developer mentioned in the post, and to all others with the same dismal outlook, we say: Get creative. Get strategy-savvy. We’ll tell you exactly how you can make money, in actionable steps no less.

So here’s the situation: It is more difficult to monetize in the Android market. This is the case because the Android market lacks the concept of in-app purchases, which has worked out so well for Apple. But guess what? There’s a work-around, and it involves strategy:

1. Create a quality product.
The characteristics of a great application are constantly in flux, so don’t just turn to what’s at the top of the charts now and mimic them. Take pride in your app.
2. Have a freemium strategy.
Most of you developers seem to have already taken this advice to heart—for the free app part of the equation. According to Distimo’s August 2010 Report (app store analytics), Google Android Market has the largest share of free apps available at 60%, versus 29% for iPhone.
3. Get downloads; increase your user base.
Do your research: time your sales well; know when to go for a price cut, and more importantly, when not to; investigate the cause of a surge in interest in your app; react to trends; publicize your app across social media channels.
4. Convert free users to paid; generate revenue.
OPTIMIZE USER EXPERIENCE. We can’t stress this enough. You cannot do this without proper analytics. You need to know how the user is engaging with your apps, both free and paid, and where the user is dropping off. To get this level of information, you would need a user-centric funnel that spans from your free app to your paid app. Once you have this information, you can appropriately place a link in your free app to a paid version. You will then be able to track this link’s performance, and adjust placement accordingly.

There you have it. The Android market as it stands can still be lucrative for developers with the right mindset, and with the upward trajectory of the market, is building up to be even more so. Step #5, or really #4.5, is to figure out the optimum price for your app. Distimo notes that applications are priced lowest in the Android Market; additionally, the average price of the Top 100 Paid Applications is higher than the Average Price of All Paid Applications ($4.57 vs. $3.23). To best monetize your app, make sure it is priced at its worth (and decide if you’re pricing for maximum downloads or maximum revenue).

Now that you have a framework, and soon, access to the proper toolkit…developers, it’s gametime. For more information on ApScience, a tool that can help you with item #4, stay tuned for coverage on Apsalar’s launch at DEMO Fall 2010.

iPhone developers, we haven’t forgotten about you. The advice here can be applied to iPhone, iPad, and web apps as well (as can all our tools). We’ll dedicate a separate post to you in the future.