We all have our great ideas, and chances are you're coming to the app business with a great idea you think is going to make you rich. Well it might or it might not, but in any case, doing market research is important in the app business as it would be for any type of business. Luckily its pretty easy to do.
Study the Marketplace
Studying the market place means taking time to see what's going on in the app store. You can do this on your phone, the iPad, or on your desktop computer using the iTunes app. Another useful resource for this purpose is http://appshopper.com. I like looking at this website because they keep a record of price changes for each app.
Why is this important? An app that has hundreds of reviews can be deceptive. If you see an app that costs $2.99 and it has a hundred reviews, that's a good indication that the app is making great money and has lots of users. On the other hand, if the developer made the app free for a week, they might have gotten all those reviews from free users, so maybe the app isn't making as much money as you think. So you'll want to use appshopper as a cross check for this purpose. An app that has a large number of reviews that hasn't been offered as free is one that has more value.
The main way to get to know your marketplace is to study the top paid, free, and grossing lists on the app store. You're only going to want to study the top 50 selling apps. In most categories apps that aren't in the top 50 aren't making that much money. That doesn't mean if you get an app ranked 120 say on the lifestyle category, that for you its not making money - it might be making $60 a day. But when researching to come up with app ideas, we want to focus on the top sellers.
Three things to keep in mind:
Spend time studying the app store. Devote some time each day to see what is selling.
Watch for trends. If you suddenly see a new type of app shoot up the charts, it could be an opportunity to capitalize. Example - a few months prior to writing this book, "monogram" wallpaper apps suddenly started showing up in the top 10 list for the lifestyle category.
Look for sustainable apps. Some types of apps are evergreen sellers.
A great resource for studing the appstore is http://www.distimo.com/iq. Read their blog including the year in review (http://www.distimo.com/blog/2013_12_publication-2013-year-in-review/) and look up data on which app store categories are the most popular.
Remember the US isn't the only big market out there. It is worth your time to also study other large markets, in particular Japan. Yes there is a language barrier but you can overcome that with some outsourcing. There may be apps popular in Japan that are not in the US and vice versa - its another opportunity to make more money.
What To Do With your Info
Let's create a systematic procedure for studying the app store, rather than just sitting down and looking at the apps. The goal is to create a new app that leverages top selling apps already in the app store.
1. Begin by choosing a category
Begin by deciding what type of app you want to develop. An entertainment app? Photography app? Or maybe a book app?
2. Look at that category and study which apps are in the top 50. Write down a few that catch your eye. Write down the app name, and 3-4 key features of the app. Do this for 5-7 apps.
3. Buy or download the apps. Free apps, of course, are a great way to approach this. Keep your eye out for free apps that could be improved upon with new features - you could do this and release a new app in the paid category.
4. For each app, note 2-3 flaws of features you wish the app had.
5. Revisit the app listing in the store. Go to the reviews section, and read the reviews. Select Most Critical. The app store customer base provides a wealth of information - see what users are complaining about or wishing for. Then give it to them.
6. After studying your five apps, reduce it to a single app you can develop right now. Your app should take in the best features of the app you're looking at, and then address its weaknesses or add 1-2 new key features.
By approaching the app store this way, you're taking a more conservative approach more likely to result in success. Looking at the top selling charts to find apps that are already working will help ensure there is a market for your apps.
But, there are already apps doing that
In business a common objection from people is that someone is already doing that. They will say to you why bother? Someone beat you to the idea.
This is a huge mistake.
If there is an app already doing x, and the app is in the top 20 or top 50 of the sales charts, that indicates that a market exists for x. People already want it. And chances are, you can spot weaknesses, complaints, or pinpoint features the existing app is missing that users want.
Give the users what they want - and they will download your app.
Often, users will buy multiple apps of the same type. This is similar to books. For example, what if someone made the argument that someone already wrote a weight loss book? Why bother with that? Wrong. People reading weight loss books are likely to buy multiple weight loss books. And, they are certianly going to be interested in buying a new weight loss book that has new ideas and insights. The same principle applies to apps.
As an example consider monogram wallpaper apps. This app has occupied a top 5 position in the lifestyle category for some time:
Does that mean nobody else should make monogram apps? NO - it means the opposite - it means you should make a monogram app as a way to start generating some steady income. If you study the lifestyle category for any length of time you're going to see several monogram apps in the rankings. Get the top selling app and see how it could be improved. Add your improvements and if you set up your app icon, screenshots, keywords and description right, you will have a money maker on your hands.