As the mobile market has taken off in popularity with consumers around the world, so has the app universe. Newer smartphones are truly impressive with all the functionality they can provide, but when you combine them with some highly useful or entertaining apps, that functionality becomes even better. With this being the case, more and more consumers are flocking to purchase smartphones. The increase in demand for smartphones that is putting them into the hands of a wider audience has in turn boosted the need for apps.
Many developers currently in the app race and those looking to enter hope they can be the ones to create the next big craze. With the success of such apps as Instagram and Angry Birds, just to name a couple, it is hard to blame their eagerness. Still, for every successful app there is an excess of those that never strike it big, so there is plenty of risk involved with app development. To help provide a backup plan to alleviate some of the risk that comes with the potential loss of valuable time and resources, the Apptopia marketplace was created.
Besides having a snazzy name, Apptopia provides a very useful service. Launched around the first week of April, the marketplace gives app developers the power to sell apps in their entirety. This includes not only the source code, but also the IP, data, customer list, and revenue. To protect the buyers, the app sellers sign a non-compete agreement. The apps are essentially put up for auction by their creators, who agree to pay Apptopia a 15 percent commission on the final sales price.
At the time of this writing, Apptopia claimed to have approximately 120 apps for sale. Over 1,000 apps were reportedly uploaded to the service, but not yet listed as their developers were not ready to officially put them up for sale to other parties. According to Apptopia’s co-founder Jonathan Kay, the service has successfully attracted over 500 users since its inception. Of the deals already brokered, the highlight was the sale of Android puzzle game graBLOX, which sold for $10,000.
Still in its infancy stage, Apptopia has the potential to have a very bright future due to the service it performs. On one side of the equation you have app developers struggling with releases plagued by poor performance and other issues. On the other side you have firms and developers actively seeking pre-existing apps to make them better and capitalize off their initial ideas. Kay said some developers simply lose interest in maintaining their apps, while others lack the necessary business savvy to expand and profit. He added: “Everyone launches an app and hopes they will be rich, but most of them will not. They may get good traction, but because they didn’t strike gold, they lose interest or move on to next idea.”
While Apptopia gives app creators an avenue to recoup some of their investments into time and resources, its appeal may be even greater to interested buyers. Some buyers looking for a pre-existing app that coincides with their planned ideas could find that purchasing an offering off Apptopia to be much cheaper than completely funding a new project from scratch. Meanwhile, others who lack development experience and extensive technical knowledge might want to purchase a pre-existing app to help them get out of the gates faster.
As for pricing that you can expect to find in the auctions, Kay said he is looking at numbers that range from as little as $1,000 per app all the way up to $150,000. Pricing is estimated on a number of factors, including app store rank and projected future revenue. Prior to purchasing a listed app, interested buyers will be able to view its performance data to submit a proper bid. Apptopia is free during its April launch, but the service will charge sellers $50 to list their apps starting in May.
Will the next Instagram come from an auction on Apptopia? Probably not, but you never know. The right coupling of a solid idea with a fresh development staff could transform an app drastically to help it reach its full potential. That possibility alone shows how valuable a service like Apptopia can be. It should grow even more as the app market does the same with developers pushing out more releases as time goes by. With Juniper Research predicting $30 billion in mobile app revenue by 2014, the chances of a prosperous future for Apptopia are pretty high.
For more on this topic, visit http://gigaom.com/2012/04/16/apptopia-gives-app-developers-an-exit-strategy/