In episode 206 of his podcast Developing Perspective, David Smith talks about the idea of the App Store being “full.” He makes the argument that with almost 1.5 million apps in the App Store, there are now enough apps to choose from and that all the good ideas have been taken; that for any basic type of app that you’re likely to think of, an app already exists to fill that need. I agree in large part with David’s observation that the App Store is now full, but the App Store being full is, I think, merely a side effect of something more important: The App Store has matured.

Yes, the shelves of the App Store are now fully stocked, but you’d expect to find that in Target or Tesco, or any mature market. What’s more significant is that the shelves of the App Store, more than ever before, are stocked with products from bigger players that compete at a higher level. These big players have more time, more money, better connections, and more collective talent than any single independent developer. They have the resources it takes to compete in the mass market that the App Store has become. These big players have money. They have reach. They can create mindshare and build valuable brands in a way that most indies just cannot afford to. The sad reality is that we indies generally can’t stand toe to toe with large corporate developers and hope to win. And so we shouldn’t try. Let the big guys duke it out over most of the market. We don’t need the whole pie. We just need a sliver. We need just enough to live our life, pay our bills, and maybe save a little bit too.

To get our sliver of the pie, though, we need to adjust our strategy. As David correctly points out, novelty is no longer a viable business plan. In an App Store that’s full, indies can’t depend on new ideas to attract the attention and the audience we need. Instead, we need to go where the big players aren’t. We need to compete in niches, where there isn’t enough opportunity to justify the attention of large corporate developers. Don’t try to create a new bookkeeping app – Intuit will eat you alive. Instead build a bookkeeping app that’s tailored specifically for veterinarians or, even more narrowly, for large animal veterinarians. Don’t build a general purpose word processor – Microsoft has that space all locked up. Instead, build a word processor that’s specialized for a particular field like academics or screenwriting. Each of these niches offer plenty of revenue opportunities for a single developer. The big players won’t be interested, though. After all, a niche with potential annual revenue of $250,000 might be an amazing opportunity for an indie, but for the big players, $250,000 won’t even cover their engineering costs.

By competing in niches where the big players don’t want to be, indies level the playing field. They avoid going head to head against large companies with massive resources. They avoid struggling against slick advertising campaigns for the competiton. They avoid having to compete with venture capital backed companies that give their products away for free. By competing in niches and avoiding match-ups that they can’t hope to win, indies reduce both the quantity and the quality of the competition that they face in the App Store. And that gives them a sort of freedom. The freedom to seek out only the most valuable customers. The freedom to charge sustainable prices for their work. The freedom to stay profitably small.

The real beauty of this strategy, though, is that it means, for indies, it doesn’t matter if the App Store is full. There’s always room for another niche product. Just as there’s always room for sand to squeeze into the gaps between large rocks, there will always be room for indies to enter markets that aren’t big enough – aren’t mass market enough – to support large companies with teams of developers. It’s in these gaps between mass markets where indies can make their living. It’s in these niches, within an already full App Store, where indies can find success.

Note: I expanded on this topic in a talk I gave at NSNorth this year. NSNorth has posted the video of that presentation online.

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As you’ll hear on this Monday’s episode of Release Notes, some of the new features of iOS 8 have me wondering about the future. Based on what we saw at WWDC, it seems pretty clear that Apple intends to introduce devices this fall with screens of different dimensions. The introduction of size classes and other features all point in this direction. The rumor mill has also been hinting at larger iPhones for some time. In particular, rumors have been flying about a new iPhone that will come in both 4.7-inch and 5.5-inch sizes. No one knows for sure what Apple has planned, but at this point I think the rumors of a larger phone are likely true. Assuming that’s the case, what might that mean for the iOS ecosystem?

The most obvious change, as this image from MacRumors makes clear, is that we would no longer be dealing with two distinct device sizes as we have to this point. Instead, the addition of a 4.7-inch and 5.5-inch iPhone would blur the lines between “iPhone-size” and “iPad-size” devices. We’d have a spectrum of sizes, with the 5.5-inch iPhone almost the size of the iPad mini. In fact, a 5.5-inch iPhone in landscape mode might actually be wider than an iPad mini in portrait.

As the lines between “iPhone-size devices” and “iPad-size devices” blur, interface conventions might blur as well. Taking the assumed 5.5-inch iPhone as an example, it might have a “compact” horizontal size class in portrait mode, and therefore conform to the interface conventions that we today associate with the iPhone (e.g. single table view presentations, no popovers). In landscape, it might have a “regular” horizontal size class and take on some interface conventions that we today associate with the iPad (e.g. split view controllers with both a master and detail view). In short, the bright line that has always existed in the minds of developers between an iPhone interface and an iPad interface may start to become not so distinct. And this is where things start to get really interesting from a business perspective.

Since the introduction of the iPad, Apple has consistently pushed developers to create “Universal apps,” or apps that run on both the iPhone and the iPad with a single purchase. A lot of developers view that as leaving money on the table, though. Today in the App Store, it’s not uncommon to find the same app present in both iPhone and iPad flavors that are available for separate purchase. This is especially true in the Productivity category, where top apps such as OmniFocus, Things, Launch Center Pro, and even my own apps are available with separate versions intended for the iPhone and iPad.

Having separate iPhone and iPad versions makes perfect sense from the perspective of a developer. It takes effort to provide a great experience on both the iPhone and iPad. Why shouldn’t we be compensated for the extra value that we provide? Contributing to that line of thinking has been the clear dichotomy between the iPhone and the iPad. Up until now, the iPhone interface was seen only on the iPhone, and the iPad interface was seen only on the iPad. As a result, it was a fairly straightforward to explain to customers why they had to purchase an app twice: “They’re two different devices.”

Developers who currently sell separate iPhone and iPad versions of their apps would be well advised to start thinking about how they plan to handle the blurring of lines between these devices. If your customers no longer see a difference between the iPhone and iPad, how will you justify to them the need for separate purchases? If Apple no longer sees a clear dichotomy between the iPhone and iPad, might they no longer accept app updates that are not Universal? If you find yourself in the position of having to give away what you once were paid for, how will you make up the lost revenue? I don’t have answers to these questions, but I’m convinced that I need to find some. Maybe sooner than I’d like.

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At last week’s Worldwide Developer Conference (universally referred to as WWDC), Apple gave independent developers a lot to be thankful for. In fact, Apple gave us many of the things we’ve been requesting for a long time – things like app bundles, preview videos in the App Store, better options for beta testing, and App Store analytics. One thing that Apple didn’t give us, though, is upgrade pricing, or the ability to charge owners of our current software a reduced price for the next major version of that software.

Upgrade pricing is a staple of the non-App Store software market, and its absence from the App Store has long been considered one of the biggest obstacles to creating a sustainable software business within Apple’s ecosystem. Wil Shipley wrote the seminal piece on the subject back in 2012, but complaints about the omission of upgrade pricing in the App Store go back much further. It seems clear at this point that Apple has no desire to add upgrade pricing to the App Store, so conventional wisdom has been that developers had better adjust to the new reality and get on with the business of building software.

But Apple may have unintentionally cracked the door to upgrade pricing with one of its announcements last week. In the latest episode of Release Notes, you can hear my podcast co-host Joe Cieplinski wonder aloud at the possibility of using app bundles as a form of upgrade pricing. His comment was off-the-cuff, so the idea wasn’t fully developed, and we both quickly dismissed it, but upon further consideration it appears that it might be possible to simulate upgrade pricing through the use of app bundles.

First, a little background. In the WWDC Keynote, and later in Session 302: The New iTunes Connect, Apple announced that they will soon allow developers to create bundles of their apps. The gist of the information provided is that developers will be permitted to bundle up to 10 of their apps and make them available to be purchased as a group for a reduced price. One of the key features announced about app bundles is that consumers will be able to complete a bundle at a “discounted price” if they already own some of the apps in the bundle. It was never defined what exactly was meant by a “discounted price,” but it seems reasonable to assume the simplest case – that customers will just have to make up the difference in price between the cost of the bundle and the cost of the sum of the individual apps that have already been purchased. For example, if an app bundle costing $14.99 contains two apps, App A (priced individually at $9.99) and App B (priced individually at $9.99), then a person who already owns App A could “complete the bundle” and receive App B at a cost of $4.99.

But what if instead of bundling two different apps, we instead bundled two different versions of the same app, released as two different SKUs? Modifying the example above, what if our $14.99 app bundle contained My App (priced individually at $9.99) and My App version 2.0 (priced individually at $9.99)? That would allow people who owned My App to purchase the new version 2.0 at the reduced price of $4.99, while still requiring new customers to purchase version 2.0 for full price. This is exactly the effect that we have been seeking with upgrade pricing all along!

Using app bundles to simulate upgrade pricing would not be without its pitfalls, though. Bundling two versions of the same app would probably require that the old version remain available for sale individually. This would inevitably lead to customer confusion and probably cause some customers to purchase the wrong item. It seems like this problem could be alleviated, though, by being generous with promo codes (or app gifting) with customers who contact you with problems. Nonetheless, it’s probably desirable to limit the time that the app bundle is available so that the original version can in a timely manner be removed from the App Store and officially discontinued.

While I still hold out hope for genuine upgrade pricing in the App Store, I realize that it’s unlikely to be introduced any time soon. Until that time, app bundles appear to offer many of the advantages of upgrade pricing with manageable disadvantages. I’m hopeful that Apple will not take action to prohibit this type of bundling, and that this type of simulated upgrade pricing will allow more complicated, higher priced apps to find a sustainable market in the App Store. So thank you Apple!

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The Alt Alt Dub Dub schedule for Friday, June 6 is below. If you’d like to join us in the Parc 55, please contact Charles Perry by email at charles@metakite.com or on Twitter at @DazeEnd. In order to offset the cost of renting the room and equipment, there will be a $25 per day charge for admission. Sessions are already showing, so come on over.

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The Alt Alt Dub Dub schedule for Thursday, June 5 is below. If you’d like to join us in the Parc 55, please contact Charles Perry by email at charles@metakite.com or on Twitter at @DazeEnd. In order to offset the cost of renting the room and equipment, there will be a $25 per day charge for admission. Sessions are already showing, so come on over.

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tl;dr: Come join us in the Parc 55 to watch WWDC sessions as they they are released. Space is limited and there is a small daily fee to offset the cost of renting a room.

I came to WWDC 2014 without a ticket, as did a lot of other developers this year. Even if you don’t have a ticket, just being in San Francisco for WWDC is a great time, but not having a ticket makes it tougher to watch all the sessions you want to watch. Apple addressed this issue last year by releasing the videos of many WWDC sessions the same day that they were presented. But it’s no fun to hole up in your hotel room and watch technical videos. Alone, you miss out on the discussions and the shared insights of your fellow developers. Because I and a group of friends wanted a more social experience while watching videos, I rented a meeting room in the Parc 55, arranged for a projector, screen, and audio, and dubbed the result Alt Alt Dub Dub.

But yesterday, Apple made a big improvement to our WWDC experience. They dropped the non-disclosure agreement on WWDC sessions. That means that we can discuss what we learned in WWDC without legal worries hanging over our head. What that means for Alt Alt Dub Dub is that I don’t have to be as careful about who joins us for WWDC sessions. And so we are opening our doors to other ticketless developers who happen to be in San Francisco this week.

Space in our meeting room is very limited, but if you would like to join us to watch WWDC sessions as they are released, we would love for your to join us. In order to offset the cost of renting the room and equipment, there will be a $25 per day charge for admission.

We expect seats at Alt Alt Dub Dub to be in great demand. If you want to reserve a seat, please contact me by email at charles@metakite.com or on Twitter at @DazeEnd. We’re showing sessions starting right now, so the sooner you sign up, the sooner you can join us for sessions.

Our schedule for Wednesday, June 4 is:

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Today we’re announcing that Leaf Hut Software is changing its name to Metakite Software. This change wasn’t made by choice, but because another company asserted their trademark over the word “leaf.” Although we maintain that our use of Leaf Hut Software did not infringe upon their trademark, it was decided that changing our name to Metakite Software was the quickest way to put this distraction behind us.

So what does this mean for all of our customers? Not much, honestly. If you use Benjamin, Action Lists, or Listmaker on your iOS device, your apps will continue to work just as they have in the past. The company has not changed hands, and you can continue to expect the same great support that you’ve received in the past.

The only change that our existing customers will probably notice is that the addresses that you use to contact us will be changing. Effective immediately, Metakite Software will be changing to the new domain metakite.com. That means you can get documentation and check out our other products at http://metakite.com, and you can get email support by contacting support@metakite.com. If you have a non-support question or comment, you can reach our general email box at metakite@metakite.com. All of the old leafhut.com addresses will be forwarded to their new metakite.com counterparts, so you’ll have ample opportunity to change your bookmarks and address book.

This episode has been a big distraction over the last few months, and frankly, it’s delayed a lot of improvements that we’ve been wanting to incorporate into our apps. But now that this is behind us, we hope to accelerate our efforts. Thank you for your patience, and thank you for choosing our products.

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tl;dr

If you want to cut to the chase, you can just read my conclusions, then share your own results.

Introduction

Over the years, I’ve repeatedly heard people say that localizing an iOS app is important for maximizing the app’s audience and ultimately the app developer’s revenue. Apple urges developers to localize their apps every year at WWDC, and similar sentiments are often shared in conversations among developers whenever they get together. As the theory goes, people like to interact with their iOS devices in their native language, and they are therefore more likely to purchase an app if it’s available in the their native tongue. That’s all almost certainly true, but the key thing that no one ever talks about is the numbers. Does localizing an app really result in more sales? If so, how big of a difference does it make? In which countries is localization the most critical? How long will it take for the investment in localization to pay for itself? These are all questions that can’t be answered without some hard data to work with. Unfortunately, that data is hard to find.

Data on the sales impact of localization is hard to find, I think, because developers are reluctant to share too much financial information with the world. And rightfully so. But I realized after my own recent experience localizing an app, that the information that’s most valuable to other developers doesn’t have to be quantified in dollars and cents.

What follows below is an analysis of the sales data I collected after localizing one of my apps. This analysis is an attempt to collect and share data that I think will be valuable to other developers, but it’s also an attempt to model a process that generates useful data without revealing too much information about revenue. My hope is that the data will be useful to others, and that other developers will use a similar method to share their own experiences with localization. By sharing solid numbers, it gives all developers the opportunity to make decisions that are based on facts instead of guesses.

Background

In this study, I’ll be looking at just one of my apps, Benjamin for iPhone (hereafter, just Benjamin). Benjamin is a niche productivity app which sells for the relatively high price of $9.99. As a result of its small audience and high price, there are rather few daily sales – especially outside the United States. Benjamin has been available in the App Store for about a year and a half, and until very recently it was available only in English. As a part of a major update (version 2.0, released June (25° 20°)13), I decided that I should move beyond my English-only strategy and localize the app for other language markets.

To understand the language choices I made in localizing Benjamin, you first need to understand a little about the app and its audience. Benjamin is a task manager based on the FranklinCovey method of time-management. FranklinCovey is one of the world’s largest providers of time-management training, drawing their clients primarily from white collar workers in fields like healthcare, education, and other corporate environments. According to their own reports¹, FranklinCovey does business with 90% of the Fortune 100 and 75% of the Fortune 500. Their bread and butter are multinational corporations. As a result, their training is conducted around the globe and in many different languages. The multinational character of FranklinCovey’s operation was an important consideration in my decision to localize Benjamin. FranklinCovey conducts training around the globe, so it’s reasonable to expect that Benjamin has potential customers around the globe as well.

With this in mind, I decided to localize Benjamin into five additional languages: Spanish, German, French, Japanese, and Simplified Chinese (which is used in the People’s Republic of China, but not in Taiwan and other Chinese speaking countries). These languages were chosen because the countries in which they are primarily used have all widely adopted the iPhone and iPad, and they all have a large base of people trained in FranklinCovey time-management – with the notable exception of Simplified Chinese. FranklinCovey has only had a presence in China since 1998², but it’s a booming market with enormous growth potential. I decided to include Simplified Chinese primarily as a prospect, so that my app would be ready as the Chinese market grows and matures.

Assumptions

As much as I wish it were not the case, I don’t have perfect information about my customers. I don’t know where they come from, how they found my app, or even which languages they speak. Consequently, there were a number of assumptions that had to be made in performing this analysis. I list the major ones below so that you can decide for yourself if they are valid.

Geography and Language

Apple doesn’t provide any information about the language used by those who download apps from the App Store, but it is possible to determine from which country’s store a customer purchases an app. Unfortunately, geography is not a perfect analog for language. One only has to look at the growth of the Spanish speaking population in the United States to know that’s true. And don’t even get me started on linguistically confused countries like Belgium and Switzerland! But despite it’s imperfect nature, some general assumptions can be made regarding geography and language. In this study, I count the United States, the United Kingdom, Canada (my apologies to the Québécois), Australia, New Zealand, India, and Ireland in the English language group. I count Spain, Mexico, and all of Central and South America (with the exception of Brazil) in the Spanish language group. France is counted as the sole member of the French language group, Germany is counted as the sole member of the German language group, Japan is counted as the sole member of the Japanese language group, and the People’s Republic of China is counted as the sole member of the Simplified Chinese language group.

Promotion

I did my best to garner attention for the Benjamin 2.0 update, which hopefully affected sales positively. Although my efforts were global (since they were on the Internet), all my promotional materials and press were in English. My assumption, then, is that if different language groups have benefitted unequally from my promotional efforts, then English language sales have benefitted most from that inequality.

Companion App

A new app, Benjamin for iPad, was launched at the same time that version 2.0 of Benjamin for iPhone was released. Benjamin for iPad was a long-requested product from my established user base, and has been well-received in the App Store. It’s reasonable to think that the availability of an iPad version has contributed to the sales of the iPhone version, especially since they sync with each other and are designed to be companion apps. But since Benjamin for iPad is localized into the same languages as Benjamin for iPhone, my assumption is that any effect that Benjamin for iPad has had on the sales of Benjamin for iPhone have been felt by all language groups equally.

Methodology

The easiest way to measure changes in the rate at which an app sells is by comparing its average daily sales over two different time periods. An app’s average daily sales (ADS) is the total sales of an app during a time period divided by the number of days in that time period. For example, if an app has 5 sales on Monday, 2 sales on Tuesday, 7 sales on Wednesday, and 3 sales on Thursday, then its ADS is 4.25 over those four days. A naive comparison of sales growth due to localization could then be made by comparing Benjamin’s ADS from before localization to its ADS after localization for each language group.

The problem with a naive analysis such as this is that it fails to take into account the natural growth of the app’s audience. Looking at the change in ADS for any language group in isolation, it’s impossible to say whether sales growth was caused by localization, or if it was caused by other outside factors. For example, if the ADS of the Spanish language group increased after localization, can the increase be attributed to localization? Or is it attributable to my promotional efforts? Or to the presence of a companion iPad app that makes the iPhone app more attractive to customers? To isolate any growth that was caused by localization, the growth in each language group must be compared to a baseline. In this case, the baseline I’ll use is the English language group, since that’s the language in which Benjamin was originally available.

In this study, two time periods were established. The pre-localization time period was Feb (25° 20°)13 to June (25° 20°)13, a span of 136 days. The post-localization time period was June (25° 20°)13 to October (25° 20°)13, a span of 97 days. These time periods were chosen because they are ordinary and uninteresting. There’s no particular promotional push that happened during those time periods, and there are no seasonal effects that should have influenced sales. They are representative of typical days in the App Store. Worth mentioning is that the post-localization period begins the day after the last effects of my release promotion efforts can be seen in sales reports.

Sales statistics for Benjamin were collected for both time periods, and broken down by language group. From these statistics, each language group’s ADS was calculated for both time periods, and growth between time periods was calculated for each language group. The difference between each language group’s ADS growth and the baseline (English language group) ADS growth can then be attributed to the effect of localizing the app for that language group.

Results

The pre- to post-localization change in each language group’s average daily sales (ADS) is summarized in the table below. The Change in ADS field represents the percent growth in each language group’s sales when comparing the post-localization ADS to the pre-localization ADS. For example, if a language group had a pre-localization ADS of 10, and a post-localization ADS of 15, then its Change in ADS would be 50%.

From the table above, you can see that our baseline (the English language group) experienced 11% growth in its ADS after becoming localized. If we assume that this 11% can be accounted for by the effects of marketing, the presence of a companion iPad app, and other effects that are common to all language groups, then we can subtract that 11% baseline from the other language groups’ growth to calculate how much of their growth is attributable to localization. This growth attributable to localization is summarized in the table below.

Note: The German language group has its results above listed as not available because of a division by zero error. In the pre-localization time period, there were no sales of Benjamin in Germany. In the post-localization time period, there were 5 sales.

Conclusions

From the results above, it’s clear that localization had a marked influence in increasing Benjamin’s sales in the regions for which it was localized. The Spanish language group in particular shows a growth in sales which I have high confidence can be attributed to the effect of localization.

It should be pointed out that that the number of sales in the German, French, Japanese, and Chinese (Simplified) language groups during the pre-localization time period are very low (in the single digits). Consequently, too much confidence should not be placed in the results for those groups. It took such a small change in sales to wildly influence the results in these language groups that it’s difficult to separate the signal from the noise. My gut (and my insight into the raw numbers) tells me that the there was a genuine improvement in sales that can be attributed to localization in the French and German language groups, though the magnitude of the improvement is unclear. The results for the Japanese and Simplified Chinese language groups, on the other hand, should be disregarded as pure noise, I believe. Sales in these groups were so low that I don’t think any valuable conclusions can be drawn.

So was localization worth the cost in time and money? I would say that it was. The Spanish localization has already more than paid for itself, and the German and French localizations are well on their way to doing the same. There’s an argument to be made that the Japanese and Simplified Chinese localizations were a waste, but my hope is that Japan in particular will become a region of future growth.

Now It’s Your Turn

I know that this was a long journey to take in order to arrive at the somewhat obvious conclusion that “localization improves sales.” The point wasn’t to just show that localization improves sales, though. The point was to demonstrate a way to measure the effect of localization on sales that results in meaningful data that can be shared with others. The method employed above allows developers to calculate and share the effect that localization has on their bottom line, without revealing exactly what that bottom line is. My hope is that other developers will use a similar methodology to publish the results of their own experiments with localization so that our community of developers can accumulate the information needed to evaluate in advance whether localizing for a particular language is a valuable use of our limited time and budget.

If you undertake a similar study of the effect that localization had on your app sales, please publish your results and contact me so that I can link to them.

Note: A version of this article appeared in Issue 12 (Oct (25° 20°)13) of The Loop Magazine under the title “Localizing Your App.” The version above includes updated sales statistics that weren’t available at the time it was first published in The Loop Magazine.

1. FranklinCovey Investor Relations ↩

2. FranklinCovey China ↩

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