For the MTN App of the Year Awards entrants, there is a clear line between how much was spent on the development of the app and how much return there has been on this investment. In some cases, return on investment (ROI) isn’t dependent on revenue as the apps are corporate or government funded, but the general trend was big spend for, so far, little reward. This doesn’t mean that the apps are setting themselves up for failure, on the contrary it’s more of a light shone on how long it can take for an app to gain traction in a competitive market. It also reflects how important it is to take the long view when it comes to app development, because immediate profit is very unlikely.
The average spend on app development sat between R500k and R2million with the average ROI sitting at less than R10, 000. While this average is balanced by different market requirements, app use cases, the age of the app and the impact of the pandemic, it showcases how complex app development can be and why it is so important to have the right support. Around 76% of the apps earned less than R10, 000; 10% had earned no revenue; 4% made more than R250k; and the remaining 10% made from R10k up to R250k.
At least three of the apps that cost less than R10k to create have achieved significant revenue and profits. One app that cost nothing to create has already earned more than R100k, and other apps that took time and money to refine are showing a steady rise towards a profitable future. App development may not be an immediate win, but the dogged determination and focus of South African developers is paying off.
Overall, the apps showed income, rising downloads and a solid foundation for growth. The developer choice of market also played a role – many of the apps tap directly into the current zeitgeist, providing solutions to problems that are impacting people and business during the pandemic.
What was also interesting was that some apps didn’t charge for their use because of the pandemic. In spite of the time and money that went into their development, they waived the fees so people could benefit from the service at a time where budgets were tight. This may have impacted on profits in the short term, but will likely see them build an established base that will return dividends in the long term.