Can a Free Lite Version Really Boost Paid App Sales

If done right, your lite version can be a finely tuned sales machine, turning thousands (or hopefully millions) of users into paying customers. So, how many free lite downloads does it actually take to see a spike in paid app sales?

On average, most iPhone developers report conversion rates between 0.5 percent and 3 percent. This means that for every 100 downloads of their free lite version, they're selling approximately one to three paid versions. If you're selling your paid version for 99 cents and your lite version is getting only 100 downloads per day, then your app sales may bring in only a few dollars each day. That's not going to generate enough revenue to financially support yourself or your development costs.

This is where success really becomes a numbers game. Volume is king. You'll need to heavily promote your lite version to increase the number of downloads it receives. The more lite downloads you have, the more your paid app sales will rise. Ethan Nicholas, the developer behind the best-selling iShoot app, reported conversion rates as high as 8 percent. The popularity of Ethan's iShoot Lite helped propel iShoot to the number-one spot in the App Store's Top Paid Apps. Although 8 percent may not seem like a lot, the numbers quickly add up if your lite version becomes popular. The free iShoot Lite received millions of downloads, and with iShoot priced at $2.99 at the time (January 2009), that small conversion rate reportedly earned Ethan more than $700,000 in just the first few weeks of release.

Specialized niche apps often see higher conversion rates since interested users are looking for specific features that only a handful of apps may offer. A popular niche app may not rank high enough to be listed in the Top 100, but it could potentially benefit from conversion rates of 10 percent to 20 percent. Why such a big difference? Popular apps that hover in the Top 100 have much more visibility, drawing the attention of a broader, general audience who may download many free lite versions out of sheer curiosity. Special niche apps are usually found by consumers with a genuine interest or need for that specific functionality, so the odds they'll purchase the full version are much better. This is why many niche apps are often priced higher than games and novelty apps. What they lack in sales volume, they try to make up with a higher profit margin.

With all of that said, very few developers will experience overnight success like Ethan Nicholas, especially now that there are more than 100,000 applications competing for attention in the App Store. A lot of factors go into building an effective lite version. But if you develop a solid lite version strategy across several apps, there is still potential to make quite a bit of money. Here's where attention to detail can really pay off.

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