With mobile health apps multiplying each year, a popular measure for demonstrating success are downloads. But a new report from Research2Guidance on mobile health app developers shows that the most successful business models for these apps does not necessarily correlate with frequent downloads.
Only 11 percent of mobile health app publishers generated more than $1 million in revenues, according to the report. The vast majority, 56 percent, made $10,000 per year or less.
For companies raking in more than $1 million in revenues, mobile health app licensing is the preferred business model. These companies, which may also license a dashboard, service or device to clients as well, are also more likely to add on development fees, service sales, and sponsorship fees. Selling medication or devices through an app as part of a transaction business model also tends to be a winner in the revenue department. Device sales is the business model with the highest share of revenue millionaires (23 percent), the report noted.
About 2,400 decisionmakers took part in the report, according to Research2Guidance. Although the majority are based in Europe (47 percent) and come from the healthcare industry, collectively they have developed 8,000 mobile health apps, which only accounts for 3 percent of the total.
Although some of the millionaire app developers had premium content as their business model, that model accounted for the fewest successful developers (5 percent).
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
The high earners among mobile health app publishers, tend to be from North America, have a higher external development budget (more than 2 times higher), 40 times higher reach (in terms of downloads per year) and have a higher technical development level (measured by integrated aggregation services APIs and EHR integration), according to research2guidance.
The report also looked at the time and money it takes to develop mobile health apps. The majority, 84 percent, took 2 years from app development to launch, but the average development time was 15 months.
The costs of mobile health app development have been increasing over the past few years, the report notes. Seven years ago, the average cost of developing a moile health app was in the neighborhood of $30,000 – $40,000. That cost has since ballooned to a current average of $425,000. Just under half of those costs come from outsourcing development to third parties.
In recent years, many mobile health app developers have focused on people with chronic conditions, but the report notes that even with a widespread condition such as asthma, which affects more than 300 million people worldwide, app adoption is less than 1 percent.
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