Business models for the mobile application market from a developer's viewpoint

Abstract

Attracted by impressive cash flows and success stories, mobile application developers are trying to penetrate the mobile application market more than ever. Despite this increasing interest, the market configuration is certainly not always clear, let alone how to formulate an optimal business and revenue model from a developer's or provider's viewpoint. Based on case study research, we identified business model characteristics and several revenue models for a mobile application provider. In addition to existing literature on business models, this paper describes two main value network configurations for offering mobile applications: 1) All-in-one mobile application provider, and 2) Outsourcing mobile application provider. Further, we focus on the business model elements of an application developer which can be subdivided in recurrent elements (e.g.: cost structure, key partners, resources, key activities, promotion channels, customer relationships and revenue streams) or unique elements (value proposition and customer segments). This actor specific research allows us to 1) develop a decision chart and 2) to extend existing guidelines in order to determine the most optimal revenue model for a mobile application. The tool and the insights can help new developers to set up their business model or existing mobile application providers to evaluate their current one.