mobile-apps, entrepreneurship, market-sizeI am developing the idea of a mobile application. I understand that to determine market size, the chain ratio method can be used.
Here is the chain ratio formula: Q = n x q x p, where:
• n = possible buyers
• q = quantity purchased by an average buyer
• p = selling price
I can determine n by calculating probable buyers. I can calculate q which would be 1, since a user will download the app once. But, I am unsure on how to calculate p, the selling price.
The app itself is targetted for Android, Apple, and Windows, and will be free to download. Money will be made though ads and more. No in app purchases are planned.
As of this, I am unsure of what value p holds and since I cannot calculate p, I cannot apply the formula to calculate market size.
The app might be free, but you expect payment via ads. This implies indirect payment.
Thus - for price, insert how much you expect to generate from ads, per device.
All content is licensed under CC BY-SA 3.0.