Title:	STUDENTS’ USE AND WILLINGNESS TO PAY FOR SMARTPHONE APPS – AN EMPIRICAL ANALYSIS
Author(s):	Emil Numminen, Stefan Hellmer, Eva Lövstål, Ola Olsson
ISBN:	978-989-8704-11-5
Editors:	Piet Kommers, Pedro Isaías, Claire Gauzente, Miguel Baptista Nunes, Guo Chao Peng and Mário Macedo
Year:	2014
Edition:	Single
Keywords:	Killer application, Willingness to pay, Mobile phone usage, Platform.
Type:	Full Paper
First Page:	160
Last Page:	166
Language:	English
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Full Contents:	click to dowload
Paper Abstract:	In 2012 the mobile phone penetration rate was 85.8% world-wide. Of this penetration, 50% was made up by so called smartphones. The use and spread of smartphones is increasing world-wide as a result of the continuous infrastructure upgrades and software developments made that smartphones rely on to fully utilize the capability of them. This change has created a new industry of software developers solely focusing on the app-market for smartphones. The underlying for all industries and markets to be sustainable is the firms’ ability to recuperate investments in development of products and services. Being able to do so requires a business model that price according to customer’s willingness to pay. Or put differently; creating willingness to pay for the product or service developed to be sustainable. Adding to this stream of research, this paper presents the results from a survey on the willingness to pay for different types of apps and services for smartphones. The main result from the survey is that the general willingness to pay for apps and smartphone content is generally low. The only type of content that the respondents showed a real willingness to pay for is for streaming of music. Only small differences can be seen for other types of apps and services when it comes to willingness to pay. The surveys show no significant difference for background variables such as age or gender nor separating the operating system the phones are using. The use of apps is however well established among the respondents. The main implication is that the industry has to find ways to improve the business models used for the industry to be sustainable since the reliance on the free-to-use business model has proven to be non-sustainable in other similar types of industries.
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