The Mathematics of Apps

  I've known for a while of one way to make money marketing apps but I recently learned of another way due to an article I read on Medium.

If you check out the internet, you'll find information on ways to make the app.  The ways include create the concept and write the app yourself.  If you can't code, create the concept and hire someone who will write the code for a flat fee.  Either way, you market it via iTunes or Google Play to make money.

Another way is to buy the original code for an earlier game that did well and has been withdrawn from the store.  When you buy the code, you agree to make changes so instead of a flying bird being the main object of the game, you make it a flying pizza, then market it.

The scenario of paying a developer and buying the code opens the door to calculating the break even point to determine at what point anyone starts making a profit.  It is not too hard to find the percent that iTunes or Google store take for marketing the app. 

In the scenario with the developer, there needs to be a bit of research done to determine the average cost of hiring a developer to write the code for a new game.  That is part of the start up costs.  For the other, the cost of purchasing the code is part of the start up cost.  In either case, the cost of getting the code done is the constant in the equation.  The next part is determining the percent the app receives from the app store is the coefficient of the variable in the linear equation.

In addition, you can have students create spreadsheets to change the selling price of the app to see what how the break even point changes for $0.99, $1.99, $2.99 costs.  Students could also create surveys of other students to determine which price most people are willing to pay.  They could also research the percent they get when selling the app at the iTunes store or Google play so they can use it in their spreadsheets.

A real life application of a basic linear equation for finding the break even point.  Every so often, there are articles of people who have created apps that succeeded so well, they were able to quit their day jobs and focus only on app development.  when students read that, they want to create their own apps to become rich but they have no idea how to determine break even points.  The above two scenarios help students learn more about that.

The other way to get money from apps is to create a service which requires the user to subscribe to the service to use the app.  The app is basically a portal to the service.  I read an article which analyzed one of the best selling apps and discovered the author threw together a bunch of things in one place but made the money on the weekly charge.  I think the weekly charge was $9.99 but over a year that is just under $520 per person. 

The article opened my eyes to reading all descriptions carefully before getting an app which indicates a purchase associated with it.  I've discovered many apps say the iTunes store will automatically charge so much per week against your credit card.  This is where people make the money is not through the app itself but through the weekly charge.

It is possible to create a spreadsheet to determine the amount made by looking at the different amounts charged for a weekly amount. This activity opens up the opportunity for students to conduct research to determine the general weekly amount and the types of apps that do this.

Real world applications at their fingertips.  Let me know what you think, I'd love to hear.