A mobile application, or "app" for short, is a software program designed to run on a mobile device such as a smartphone or tablet. These apps can be downloaded from a digital marketplace, such as the Apple App Store or Google Play Store, and installed on the user's device. Mobile applications offer a wide range of functionalities, from social networking, entertainment, and gaming to productivity, education, and health. Users can interact with the app using a touch screen or other input methods, and many apps also make use of the device's hardware, such as the camera, microphone, or GPS, to offer additional features.
In essence, a mobile application is nothing more than a product. Keeping this point in mind, we must treat a mobile application like a product right from development as it undergoes the same cycle as every product. On the business side of it, this is what Android app development companies and iOS app development companies sell. They also extend their mobile application development services in the form of support to their clients. Let us go to the basics of product development to understand this deeper.
The product life cycle describes the stages a product goes through from its introduction to the market until it is retired. The five stages of the product life cycle are:
- Development: The development stage is when a new product is conceptualised, designed, and tested before it is introduced to the market.
- Introduction: The introduction stage is when the product is launched in the market. During this stage, the focus is on creating awareness about the product and generating demand through marketing and advertising efforts.
- Growth: The growth stage is when the product gains acceptance and popularity among consumers. Sales increase rapidly during this stage as more people adopt the product.
- Maturity: The maturity stage is when the product reaches its peak in terms of sales and market penetration. During this stage, competition increases, and the focus shifts to maintaining market share and maximising profitability.
- Decline: The decline stage is when the product's sales begin to decline due to changing consumer preferences, increased competition, or product obsolescence. During this stage, companies may choose to discontinue the product or reposition it to extend its life cycle.
Let us go deeper into these five stages in the application development arena.
The development stage is defacto considered the longest and most precarious step among all the stages. This is where there is no clear path on how to proceed with the ideation and conceptualisation. mobile application development companies start with a functional beta version and send it out to small groups of users and their feedback is used to make the necessary changes and iterations. This process is done again and again until a seemingly perfect application is developed(emphasis on the word ’seemingly’, as no application can come out to the market in a perfect state). Mobile app development services have their developers and testers work round the clock in this stage to deliver the application as per the client’s requirements and users’ experience.
The application is now released to the public/users after having seemingly developed an application that is spot-on in user experience. This stage is commonly known as the introduction or introductory stage- this can be the most expensive stage of the application development process. This stage involves heavy marketing, in the case of a D2C or a B2C application. The application is heavily marketed with the objective of expanding the user base. The job of the proprietors or the marketing division here is to make the users understand the market gap/problem the application fills/solves. Once a user understands this, it is logical to conclude that the user will install the app, should he/she require its service(s). Various marketing gimmicks and offers render the user curious and interested- which in turn makes them install and use the app, initially. Let us take the case of CRED. They lost about 360 crores in FY 2020 alone. For every rupee cred made, they lost 727 rupees which is a massive cash burn rate. Their entire raised capital went to marketing and offers to acquire new users. Now CRED stands proudly at a $6.2 billion valuation.
Once the application acquires a set number of users- let us call this the threshold number, it is assumed that the application has built enough momentum in the market to maintain a certain level of sustainability. The application must now focus on both expansion and sustainability. This is the growth stage- this is also a complicated and precarious stage- the balance between cash burn and revenue must be carefully looked after so that the balance doesn’t tip on either side. This is also where competitors emerge and the application must start changing and evolving to suit consumer comfort. Let us take the example of Ola. Ola solved a predominant problem in the Indian market- scarcity of duration-based private transport(Taxis, Auto-rickshaws etc). This scarcity is mostly due to improper geographical demand-supply distribution which has adverse effects on both the public who wish to avail of the service and taxi drivers who cannot pinpoint where the demand is. Ola precisely offered a medium of convenience for both drivers and customers. Ola also tools leaps of accountability in terms of payroll control and the overall safety of both its drivers and customers.
Ola did the market experimentation by spending billions and years of research. And just like that, when it was certain that a market really is there for this service, Uber entered the battle. Uber started competing with prices and offers, so Ola had to do the same. In essence, Ola had to revise their entire model of business to emerge triumphant against Uber. What is more interesting is that, while these two Goliaths were fighting against each other, a David by the name of Rapido came out and disrupted the market again. Both Ola and Uber now had to revise their model to survive. Uber started offering bike taxis, competing with Rapido while Ola entered the EV market and diversified.
To summarise this stage, this is where the war really begins- applications face the most flak here. It’s less about development and more about strategy and operations. This is where application proprietors lawyer up and become more business oriented.
This stage slowly matures to a point where the sustainability factor goes down. This stage is commonly regarded as the maturity stage. This is where applications must start seeing profit. The maturity stage is where there is no more growth and you tweak your business model to be more profit-oriented than revenue-oriented. It must either start seeing profit or proprietors must start selling stakes of their company, gather capital and reinvest it for future cash burn. For this let us take the case of Zomato. A typical IITian unicorn, that made its way through a decade by being in the growth stage. It finally hit maturity during the COVID pandemic and went public. The reason behind their IPO is that they needed capital to compete against other delivery applications like Swiggy and UberEats. This is the stage where investors can expect a tangible return on their investment- other than a valuation increase.
As we say “All good things must come to an end”, there definitely comes a saturation point, no matter how successful the application is. This stage is termed the decline stage. This is where the application itself must be sold to or acquired by another larger player in the industry, or pivot to a different business altogether. Goodreads was acquired by Amazon for this very same reason. Goodreads had no more room to expand and desperately needed support from a giant willing to enter the industry- credits to their good fortune, Amazon paid a generous sum of $150 million back in 2013 to acquire Goodreads and everybody involved in the deal came out happy. Companies that do not enjoy the same good fortune as Goodreads just die out like Yahoo!. In 2008, Microsoft made an offer of a staggering $44.6 billion dollars to acquire Yahoo!, but Yahoo! rejected Microsoft’s offer and decided to venture further on its own. They, unfortunately, couldn't take the heat of the competition and slowly died out.
Now, to get the actual point across to entrepreneurs who want to stage a market-disrupting business through mobile app development services, they must keep in mind all these five stages in order to map out a proper, well-structured long-term business plan. It is a common mistake often among the early-stage entrepreneur community where they rush into making a mobile application without thinking things through. A mobile application isn’t the first step towards creating a successful company- it is more advisable to create a proper, full-functional web application first and test it out first.