Simon-Kucher: App value untapped by Telco & Media

Players in the telecom & media sector and app builders can extract much more value from their apps. A new survey by Simon-Kucher & Partners shows that more than half of consumers believe that apps are not expensive and are willing to pay more. In addition, about half of the decision-making when buying apps lies in non-price related factors, leading to substantial capitalization potential which is currently left untapped.

The global consulting firm asked 1,000 American consumers to provide their view on the value of apps. The survey points out that consumers perceive apps as relatively cheap. 52% of clients admitted that they thought apps are “not expensive” – a very high percentage for an industry that is known to be very price sensitive. The potential for app builders is evident: a small increase in price could lead to a more than proportional increase in profits.

In the study 'Apps and Digital Content Study' the consultants also conclude that in 38% of the cases price is the most important factor consumers consider when they purchase an app, followed by personal recommendations and listing. For apps that are extremely common or face high competition, a price hike may lead to issues. Yet for the large majority of other apps – such as fermium apps with advertising or in-app purchases or paid apps – it is good news. The consultants from Simon-Kucher & Partners turn the view around and reason that the importance of non-price related factors provide large capitalization possibilities.

''Roughly half of the consumers is not selecting apps based on price. That means that companies can – by offering the right suite of services – win these customers over even with higher prices. Key is that these willing customers are targeted though a 2.0 approach to marketing, including multi-channel marketing and social media'' says the consulting firm.