Messaging application WhatsApp has revised its pricing model on iOS to an annual subscription that matches that offered to owners of Android, Nokia and BlackBerry devices.
Until now, iOS users had to pay a once-off download fee of $0.99 for the app. Users will now be able to download without charge, but will pay the same price once a year to continue their subscriptions.
App analytics firm Distimo lists WhatsApp as the top paid-for iPhone application on the South African App Store at R7.99 before the change came into effect.
Dave Duarte, principal of Ogilvy Digital Marketing Academy, welcomes the switch to a subscription model and sees it as a logical step to keep the company afloat. "It's great news because I get concerned when I use services, become dependent on them and when there isn't a business model they might go under," he says.
Duarte says this is one of the ways in which WhatsApp's revenue stream can be optimised and sees the subscription fee as "ridiculously cheap". The instant messaging platform enjoys great popularity, according to CEO Jan Koum, who indicated it has more than 200 million active users.
Payment as barrier
Fuseware CEO Mike Wronski cites a Deloitte study on South African users' engagement with mobile applications in explaining what the change in pricing approach could mean in the local market. According to the study, 40% of the respondents said the biggest reason for not downloading mobile applications was their unwillingness to pay for apps.
"It seems that payment is a barrier to entry, but it's more about the payment process hassle than the money itself," Wronski says. "Mxit did very well for itself by easing the payment process through SMS shortcodes, but WhatsApp payment is a much more laborious process in comparison."
Wronski does not see the change affecting habits among high living standards measure users accustomed to purchasing apps, while he sees it as hindering WhatsApp's growth in mainstream SA. He also says WhatsApp's decision allows the developer to "focus on annuity income to reduce operational risk and fund further development of the app".
The timing of the decision becomes critical to achieve these aims, Wronski says. "The longer WhatsApp waited, the more recurring revenue they would have lost out on."
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