Assignment

Supply and Distribution

The demand for mobile apps is high, and the supply of these has shown to accelerate. The supply of mobile apps increased also due to the demand for smartphones. Although, the supply of app developers are declining. Their hourly rate has dropped, and this makes it harder to stay competitive. The demand for app developers exceeds the supply on hand, and has now started to affect the mobile app industry. App developers are now competing at lower rates, and trying to push more apps out to the most known distribution platforms for mobile apps. “The Wireless Industry Partnership (WIP) already counts 120 active application stores of all sorts and sizes in their latest survey.”4 There are several distribution platforms for mobile apps, but only two of these stand in the lead as the best known. “The Apple iTunes app store currently carries 392,871 apps, and Google Android Market is closing in with 190,067 apps in store. Finding the tech talent to help with the design and engineering is the difficult part because so many people don’t have that tech skill set that’s needed to make a successful app. In order to supply the best app, IT requires systems that can process massive amounts of data, continuously deliver new infrastructure environments in minutes, be flexible enough to integrate with outside platforms and technologies, and deliver exceptional customer experiences. The tech talent in demand exceeds the supply on hand. Businesses are creating their own online platforms that more effectively assess a potential employee’s match with the skill requirements and culture of the company.5 IT recruitment is a slow process, and creating a platform that can locate tech talent needed is a challenge. Talent is all over the world, but the question is how can you get them to your business where you need them most. There are two main distribution channels in the app industry, Google Play Store, and Apple’s App Store. They have their own set of rules and regulations to adhere by. When app developers choose to use these channels, they have to keep in mind of their content, the development tools used in the process, and how suitable it might be for all members. “Google does not ban Android Apps based on content in the way that Apple does.

Price

Our College Buddy app would probably be a medium minimum viable product, as it is intended to be competing with fairly established apps in the market. The various steps in the process of developing an app might include wireframing, app screen design, ecommerce and in-app purchases, programming, and deploying the app into the app stores. For a Medium MVP native app, the total estimated cost of development for the app to be distributed through two platforms would be in a ballpark range of $110,000.3 This number includes all the steps of the process, and the talent needed to successfully create a quality app that is functional and user friendly. So if we produced about 40,000 units to start with, the cost per unit to produce it is around $2.75. Native apps are what we are looking for because they have an advantage in user experience, no lagging or limitations, extra support, and have more tools. The key average CPI for iOS app Cost Per Loyal User in US is $2.78, and the Android app in US (Google Play market) is $1.91.4 Considering that we have a potential target market population of 5.8 million students in the US, at least 70 percent of that might download our College Buddy app, and that would be 4.06 million. The wholesale price in bulk would be $1.91 or $2.78, or an average of $2.35. The retail price for a premium subscription is $10.99 per month that includes all features of the app. So our profit would be a range from $8.21 to $9.08 per user per month, or an average of $8.65 monthly profit price. For 8 months out of the year per user that is $69.20, and if 70 percent of our target market were on a monthly subscription all year round, we could generate an annual revenue of $280.9 million.

In-app purchases vary but would include the Bookplace, where students can buy books from other students or Textbook Brokers. We will withhold 25 percent of total cost from book transactions sold from student-to-student. Textbook Brokers will partner with us and our company will get 35 percent of profits when sold through the app. We also have developed a pricing strategy with our partners that include movie theaters, bowling alleys, intramural sports leagues, gyms, transportation services, event stadiums, and other meetup spots. Most of our partners offer seasonal 5 to 10 percent discounts through our app and some may also offer memberships. We will get our percentage of the profit when our users join groups for activities that cost or have fees. For intramural leagues, there is a semester membership fee of $20 that will let you play on as many teams as you want. Other ways of making revenue are users clicking through ads and videos for other products, email marketing, College Buddy branded merchandise, collecting and selling data to third parties, and much more. For it to be less costly, our company will use the QuickBooks GoPayment app, or PayPal to pair with our merchants that will allow payment transactions to be easier.