On Avoiding Publication of Paid Android Apps

A while back I decided that we would shelve all of our Android application plans. This was not a comfortable decision since we had bet on Android and made the requisite investment. The reason is very simple: we see no prospects to build a viable business for paid applications.

The problems with Google's Android Market are legion and have been widely discussed, including by me. Until Google and its carrier partners address these problems there is no money to be made. The Android Market seems set to be a playground for only hobbyists and perhaps for some companies that want to at least establish a brand presence. Major problems with the Android Market are the difficulties for users to purchase applications and a load of commercial and technical problems that Google and the carriers ignore or simply shift blame onto the application publishers.

Of course this does not mean there is no money to be made today. It is that the revenue potential is small. A casual perusal of the paid apps in the Market indicate that even the very best titles are making no more than a few tens of thousands of dollars. This is for an installed base of over 1 million G1 phones.

But why not take the plunge anyway and establish a brand presence that levers the substantial installed base for our free apps? There are a few good reasons not to do so:

• Support: Every published app needs to be supported. This requires being available for answer questions, resolve bugs and establish a regular pattern of new features. Support has a minimum cost while costs scale more slowly than sales. Therefore, support is a burden if sales are low. It also removes resources from other, potentially more-valuable work.
• Brand damage: With the numerous technical problems with downloads, user credential verification, copy protection and more that Google is deaf to and the carrier (T-Mobile) deflects to and blames the publisher, there is a serious problem with supporting our brand. In other words, Google's problems are staining the publishers' reputations.
• Merchandising: We are a Canadian company, which Google Checkout neither supports nor has indicated any time when it will be supported. To sell on the market today we would have to establish a US entity solely for this purpose. If (when) they do support Canada, it is unclear if they will support pricing in the users' currencies; today they only support pricing in the currency of the publisher's country which creates purchasing woes.
  

In short, the costs of publishing a paid app to the Android Market at this time exceeds the combined benefits of revenue and brand awareness. We will continue to monitor the situation and will revisit our position if there are substantial improvements to the Market. This is a shame since the Android technology meets our requirements so well.