Why Investors Are Looking At Mobile Apps, And WhyYou Should Too

By Adriano Mesina

The whole world is under the spell of mobile apps. You can see people using it for shopping, communicating, and business. People now expect businesses to have their mobile apps. Just like the mobile phone itself, apps have become a necessity for companies to gain an advantage over their competitors as well as keeping up with the competition.

Numerous investors and businesses now understand the value of mobile applications, but since the mobile application industry is relatively new, not everyone knows how to use it to their advantage. 

Overview 

A mobile application, or apps, is a software application created to run on mobile phones, tablets, or watches. Apps were initially for product support, like email and contact databases. However, popular demand for apps led to rapid development into diverse areas such as mobile games, GPS, factory automation, location-based services, ticket purchases, and order-tracking.  

Now, there are millions of apps available for all kinds of users. Apps are usually downloaded from application platforms that are administered by the owner of the mobile operating system, like Google Play Store and App Store. Some apps are free, while others are paid, with the earnings being divided between the application’s designer and the distribution platform. 

If you are looking to buy a new mobile device, chances are it would come with pre-installed apps. 

Reasons why you should invest in mobile apps

With the importance of mobile applications in mind, here are some more reasons why mobile app investing might be a viable option for you.

1. Everyone is mobile

We cannot deny the fact that consumers have switched to their smartphones to look for local businesses and to complete a transaction. Gone are the days when a website would suffice since most people are abandoning their desktop browsers in favor of mobile apps. 

2. Apps are more accessible

A company with an app is like having its business inside people’s pockets. Apps allow customers to get all the information they need while they are in the car, the train, in a restaurant, or the bathroom anytime.

3. Good for brand promotion

Mobile apps can be great for brand recognition. If your business can develop an app, you will quickly find yourself or your business in iOS and Android app stores. Customers who are looking for the kind of services or products you offer can see and download your app.

4. Increased customer engagement

Mobile applications are truly empowering for consumers. It gives them a platform wherein they can engage with companies like never before. At the same time, businesses can reach their customers quickly as well. This improves the business-to-consumer relationship by a mile.

5. Gets businesses in touch with a larger and younger audience

Millennials and Gen Zers have gone mobile for years now. It is difficult to engage them using obsolete techniques. The younger generation have their mobile devices with them all the time, and they rely on these devices for information. It is therefore important for businesses to use mobile apps to reach out to these people.

6. Convenience

No doubt, mobile applications are more convenient to use than websites. Apps are structured with ease of use in mind. This will help your business gain your customers’ trust.

7. Better customer support

Customers can easily get everything they need through a good mobile app. It also enables them to communicate with the company much faster. Transactions are easier, and product offerings and announcements are made more efficient by apps.

8. Easier market research

Businesses can use mobile apps to collect customer data that will help in their market research efforts. If used properly, these data can help present content that customers are interested in.

9. Value creation

Having their apps make businesses more professional. Whether you like it or not, customers now look at businesses with their apps as being more trustworthy. Apps really create value for both consumers and businesses.

How to invest in mobile apps

Now that mobile apps have caught your attention, you may be wondering how you can participate in this booming industry. Indeed, with the things that are happening to us right now, apps are hitting it big this year, and it’s going to get even better. Here is how you can approach investing in apps. 

1. Consider old fashioned, physical businesses

This is a good starting point for new investors. This is a good option if you are interested in apps but do not want to invest heavily just yet. The more sensible way to invest in apps is to get indirect exposure, as investors are watching with a cautious eye. Chilli’s, Burger King, and Domino’s have downloadable apps on iOS and Android.

2. Diversify 

Think of diversifying your portfolio to several app companies to reduce your risk. While many apps have made it big, there are many more that did not gain traction. It is a highly competitive market, as mobile devices can only store so many apps.

3. Consider Exchange Traded Funds

ETFs are another option for you. ETFs allow investors to get exposure to various equities, which limits the risks. It is advisable that whatever you use to invest in this market should be something you have on the side. In other words, you should have high tolerance for risks.

4. Follow trends

Know where the users are and what they are using. Apps related to food and drinks are doing well, as well as apps that connect friends virtually like iMessenger and Snapchat. 

5. Be wary of game apps

Game apps seem to be the hottest thing right now, owing to its popularity among developers. According to Statista,  almost 25% of all mobile apps produced are game apps. The second placer, business applications, only account for 9.78%. That is 4 times more. However, the same study says only 65% of mobile device users have game apps on their devices. There is more supply than there is demand as far as game apps are concerned..

Conclusion

The mobile app industry will see huge growth for the next five years. If you wish to get involved in the business side of this type of software, remember the risks. Diversify as much as possible so that these risks would not affect you as much. Try to invest only as much as you are willing to lose, then assess if you want to pour in more funds.