Free apps vs. Paid apps

Disclaimer: I use both iPhone and an Android phone. I have used all three major desktop operating systems – Windows, various Linux distros, and MacOS. And I have also used Android tablets, and iPads.

A lot of non-tech-savvy people don’t understand the difference between free and paid apps. And many people who do, just ignore it. There’s one thing you need to understand, there ain’t no such thing as a free lunch. We’ll start this post with that adage.

When something is being given out for free, there’s always a catch. For example, right now, my personal money management service is free for all (shameless plug). But as soon as I fix all the bugs, and implement all the requested features, the service is going behind a paywall. The reason? There’s no ads and no tracking in my app, not even Google Analytics.

When a developer, or even a company, is giving away an app for free, there’s definitely a way of making money from it. It’s a well known fact by now that all apps implement some kind of tracking. The most common reason given for this is that it helps in improving the product, or for artificial intelligence. But if it’s only going to improve the product, why not do it? That’s a good question, and if you’re interested to know more about this, let me know in the comments below. I have too much to say about that, and I’ll make another post dedicated only to tracking. For example, the battle of tracking users that Facebook is fighting against Apple right now is quite interesting.

But this post is not about that. This post is all about the tradeoffs that you make when you prefer a free app over a paid one. Let’s get started.

A developer builds an app primarily for two reasons:

• The developer wants to make some extra cash.
• The developer wants to build an app for personal use, tailored to their own use cases.

The second reason, as far as I have seen in my developer-friend circle, is quite common. We all have at least one use case for which most apps in the market just don’t do it. It could be a missing feature, privacy concerns, unbearable UI, or something else. I decided to write my own money management app for this reason. I didn’t find anything that was customisable enough for my liking. So I decided to build my own. And later I just opened it up to the rest of the world.

The first reason for building an app, to make some extra cash, is what’s this post about. When you build an app to make money from it, there are two ways in which you can approach the money making part. You can either use services such as Google AdSense to place ads in the UI and make money from that, or you can keep it completely ad-free, but make it a paid app.

In the Android world, we see a lot of free apps, for almost everything we do on the phone. 99% of Android users I know have never paid for an app on their phone. I myself have paid only for two apps, ever. But on the iOS side of things, most people I know have at least one paid app. Even though they hesitated to pay in the beginning, they’re very happy they did. Why do we see this difference? I’ll try to explain what I have understood, by being a user of both the platforms.

Free Apps

Android makes it very easy to build apps and release them on the Play Store. You can become an Android developer for free. You just need a computer which can handle Android Studio, and you can start building apps. There’s nothing else stopping you. And if you want to release this app of yours on the Play Store, you just have to pay a one time charge of only $25. The barrier to entry is so low, compared to other platforms.

And I’m not sure if you have observed it or not, but placing ads in Android app is just so simple. Google makes it so fool-proof for developers to sign up for an AdSense account and start showing ads on their apps. There are different types of ads as well. Some just show up as a banner at the bottom of the screen, some can be embedded into the long list of cards in your apps, and some can even popup as full screen ads in-between activity transitions in your app. All these things are very easy to configure. Not just in Android apps, actually. Even on my personal blog, where I still show AdSense ads, it’s very easy to configure all these things.

Now that you have all these ads configured, and released in the Play Store, you start money, right from day one. Well, only sort of. Just because you have ads in your app, doesn’t mean you start getting cheques every month from Google. If you want to make money from ads, you need scale. If you have just a few hundred users, you’re not making any significant amount of money. And if you want to depend on ad money for your livelihood, you better have an app that millions of users are actively using.

What I have learned from personal experience is that when you want to make money from ads, you are not going to be serious about your users. You will always be disconnected from them. Because those users are not paying you directly, or at all, you are not accountable to them, you don’t have any kind of responsibility towards them. So if they report a bug, or request a feature, you don’t even have to acknowledge them. This is unless you are very serious about your product or your users. But my argument is, if you are really serious about your product or users, you are not going to give them a bad user experience by showing them ads.

Paid Apps

As I mentioned earlier, if you want to make any significant amount of money from your app, you can’t go with ads. You just need to put it behind a paywall. There is a benefit of putting your app behind a paywall: you get loyal customers. What do I mean by that? I mean you get customers who actually like your app and are going to use it regularly. There’s no point in having a million downloads of your app but only a hundred active users. It only means that about a million people tried your app and didn’t like it.

And paying for an app is beneficial for consumers as well, because you can be assured that the developer is serious about the app, is going to listen to your feedback, is going to fix bugs, and possibly even introduce features in the future. It’s a win-win for both the developer and the consumer.

And when you are already being paid for your app, you’ll not want to throw a bunch of non-sense ads to your users. That would just be unacceptable. So the user gets a very pleasant user experience, you get paid, and everybody is happy. This is what we see over at the iOS world. Most apps you’d want are paid. But the number of ads you see on an iOS device is almost close to none, unless of course you install some shady apps. Believe it or not, I have paid real money just to see the amount of RAM being used in the many bar on my MacBook Pro.

Now that the difference is clear, let’s address the disclaimer that I’ve put up at the beginning of this post. It might seem a bit irrelevant, but let me explain. The reason I put that up is, I don’t want to be seen as an Apple fanboy. Even though I actively use a MacBook Pro (both personally and professionally), and an iPad, and an iPhone, I also use an Android flagship smartphone, and Linux-based computers. I don’t use Windows though, and I wouldn’t recommend it either.

I have experienced apps on both the ecosystems. Let’s just consider Google and Apple. When you signup for a Google account, you get a massive 15GB of cloud storage. After well over 1.5 decades of having my Google account, I’m not even close to using up all the 15 gigs of that storage. But when you signup for an Apple ID, you get just 5GB, 1/3rd of what Google offers. And if you signing in to that Apple ID on an iPhone with backups enabled, you’ll easily use up the whole 5GB of that in just a week. You’ll have to start paying Apple for more storage every month.

Even if you are willing to pay for cloud storage, you can notice that Google charges slightly less than Apple there as well. With Apple, you have to pay the dreaded, infamous Apple Tax. But you need to think here, how is Google able to offer these services for so less? Of course, Apple is making huge profits on all its products. But that’s not the point here. The point is, Google scans everything you upload to Google services, not for virus or anything, but for data.

Data is the new oil.

And Google is making good money on this oil. Not just Google, everybody. And Google is not the only one who is collecting data. It’s very well known that Apple also collects data. Apple collects data every time you open an app, even on your Mac computer. But the difference here is, Apple uses this for its own internal purposes, to improve its products. Google, on the other hand, uses this data to sell ads. Google uses this data to tailor ads for you.

Again, I want to repeat that I use products from both the companies, both hardware and software products. But I give extra attention to what kind of data I’m sharing with both companies. I wouldn’t trust Google with my photos, or my bank account details, for example. And especially location. Google is notorious with location data collection, especially on Android devices. You may say that switching off location on your Android device will prevent this. To which I’ll say, “yeah, right!”

I don’t want to drag this ranting for long. But by now, you should’ve got the idea about what you’re giving away by using free apps and service vs. paid apps and services. But then again, not all free apps and services are the same, and not all paid apps and services are private and secure. There are always outliers everywhere. Just make sure that you’re making informed decisions about your data.