Android Intelligence Analysis

SwiftKey's sale and the unsustainable state of the mobile app market

There's a troubling message lurking within SwiftKey's sale to Microsoft, and it's one we all need to take some time to consider.

SwiftKey Microsoft Acquisition

Friends, Romans, Internetmen-and-women-and-any-other-gender-neutral-designations-that-may-be-appropriate-in-a-salutation-such-as-this: Lend me your ears. You may not like what I'm about to say -- truthfully, I'm not entirely sure I like it myself -- but I promise you, it's important:

This system we have of paying a few lousy shekels for complex mobile apps? Apps we use and rely on every day, in many cases, and for which we expect to receive eternal upgrades and support? Yeah -- that's gotta go.

I know, I know: The very thought of paying more than three bucks for a piece of software these days is tough to swallow, no matter how much value we may get out of the thing. But as this week's sale of SwiftKey to Microsoft underscores, that sort of penny-pinching mentality makes it tough for mobile app developers to survive on their own in the long term. And sooner or later, that's going to turn into a serious problem for us as consumers.

The SwiftKey side of the story

This story is really much broader than SwiftKey, but the app's acquisition is a good launchpad for a discussion we've been needing to open up for a while.

Let's begin with some truth from the friendly troops at the Financial Times, which broke the news of SwiftKey's acquisition:

Despite being installed on more than 300 million devices, SwiftKey has struggled to find a reliable business model. After initially selling its predictive keyboard app for $4, the company switched to a free download model in 2014, selling extras such as themes and personalization via in-app purchases.

That's not all: SwiftKey also had the unusual advantage of selling its software to manufacturers like Samsung, who used it as a foundation for their own custom preinstalled keyboards. But yet, it apparently still struggled to find a way to turn its popular and favorably reviewed app into a sustainable business.

And remember: That's coming from a large company with lots of resources (and millions of dollars in investor moolah) at its disposal. Compare that to the countless independent developers who work on their own to develop and maintain apps in order to make a living. If even an organization like SwiftKey couldn't swing it, how can those smaller operations possibly support themselves and keep improving their products when they depend on a measly $2.99 per user for a lifetime of work?

The answer is simple: They can't. I've heard from numerous developers over the years who have grappled with this issue and racked their brains to find a solution.

The problem is that such a solution isn't exactly easy. There is no one-size-fits-all magic fix here, and any viable option is going to require some serious reshaping of expectations on behalf of us -- the users.

The app cost conundrum

Now, let's get one thing straight: For some apps, a nominal one-time fee really does make the most sense. But for more complex and time-requiring titles, especially those that continue to evolve meaningfully over time, we're going to have to start being more accepting of alternate payment approaches. Either that, or we're going to start losing the developers who currently devote their time and resources to maintaining such efforts.

One interesting possibility is the notion of being asked to repurchase an app every year or two, whenever a major new version is released. We saw this attempted on Android with Chris Lacy's Action Launcher 3 app -- and boy, were some people pissy about it.

Lacy's justification was that Action Launcher 3 was a complete ground-up rewrite of his program. As he wrote in a Google+ post at the time:

Considering the vast majority of Action Launcher 2 sales occurred over a year ago, and I make my living selling my apps, it's very tough to justify from a business perspective giving all this hard work away for free in an update. I feel very happy with how many updates Action Launcher 2 received over the previous two years (11 major updates, >100 in total), as well as the value for money Action Launcher Pro users have received for their $2 to $4 purchase. But charging for Action Launcher 3 is the right move to ensure the product has the opportunity to grow as I want it to going forward.

Lacy noted that those who didn't want to upgrade could continue to use the older version indefinitely on an as-is basis. He likened it to the way someone might buy a new "Call of Duty" game every year, or buy a sequel to a movie instead of automatically receiving the next edition just because they bought the first.

If you ask me, that makes an awful lot of sense -- and the fact that people were upset about Lacy's experiment speaks to the fact that we need to adjust our expectations. Paying four bucks every year or two for something like a launcher -- something you use constantly throughout the day and on any number of devices you own -- is perfectly reasonable. Hell, it's a steal, especially when you consider the numerous upgrades and new features you'll receive throughout that product's lifetime. Let's keep it in perspective, folks: We're talking about less than the cost of your daily Venti Mocha-Nut-a-tino here.

And here's what's important: That once-per-major-upgrade payment structure is going to let a guy like Lacy -- a single person working on his own to develop, maintain, support, and market an innovative app many of us adore -- continue to work on creating software that makes our mobile devices more efficient and pleasant to use.

The value variable

As we start to see more apps trying to experiment with such alternate approaches, the key will be for developers to find a cost and payment model that matches their app's perceived value. Suddenly telling customers they're going to need to pay an ongoing $40/yr. subscription for the same features they previously enjoyed free of charge, for instance, is invariably going to rub people the wrong way. Just ask the crew behind Pushbullet.

Under the right circumstances, some services can justify a recurring subscription-based approach; others, no matter how hard they may try, just can't. But the perceived value of the service and the way the cost is presented makes a world of difference in how the plan is received, as we can see by comparing Pushbullet's transition to Feedly's -- a similar free-to-subscription shift with a very similar pricing model. In the latter case, few people seemed to complain and most left the situation feeling warm and fuzzy inside.

As long as that value variable is determined correctly and presented well, the real challenge isn't on the developers so much as it is on us. We're reaching a crossroads in the world of mobile apps, and it's up to us to decide whether we're going to cling to the unrealistic 99-cents-is-all-I'll-pay mentality we've been trained to have or whether we're going to accept a more sustainable approach -- one that'll let our developers actually earn a reasonable ongoing living for their work.

Ultimately, being willing to pay for the tools we use won't keep great apps like SwiftKey from getting gobbled up in expensive acquisitions. It will, however, make it more feasible for developers to turn their work on Android into long-lasting careers -- and ultimately, that's a win for us all.

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