How SwiftKey plans to make money by giving away its popular app

SwiftKey announced that its Android app will now be available for free. It previously sold for $3.99 and was the second best-selling app in the Google Play store. What explains the switch?

The Android-powered Samsung Galaxy S4 smart phone.

SwiftKey, the popular Android smart phone keyboard app, will now be available for free. 

On the surface, this may seem an odd move seeing as the keyboard is the "second-best-selling-app in the Google Play Store" where it has been sold for $3.99. The app is also adding more than 800 emojis to let users communicate emotions more easily and fluidly as they type, though only for Android version 4.1 or above. Other updates include more than 30 new themes, stronger predictive typing capabilities, and five new languages — Belarusian, Mongolian, Tatar, Uzbek, and Welsh. 

As a way of thanking those who already use the app, SwiftKey announced in a blog post that current users will receive a "Premier Pack" consisting of 10 new themes that will otherwise be sold for $4.99. 

The app also announced the opening of a SwiftKey Store that will be stocked with add-ons, which is where the app will likely generate revenue. 

Known for its intuitive nature that lets users swipe a finger from one letter to the next as opposed to typing, the app's influence is evident in a prominent new feature being rolled out by Apple for its new iOS 8 mobile platform. The feature is called QuickType and, like SwiftKey, will suggest words as you type. iOS 8 will also allow for third-party keyboards to be downloaded from its app store, meaning users will soon be able to use apps like Swype and SwiftKey on iPhone, something previously not possible. 

That's a lot of competition for the company founded in London in 2008 by Jon Reynolds and Ben Medlock. And as the company pushes to expand its reach, it seems to have realized the philosophy guiding much of the mobile app market: Go free or go home. 

"As we go global, there's an unwillingness of consumers to pay for an app that they aren't sure they need," Joe Braidwood, chief marketing officer for SwiftKey, told Bloomberg. "We want to be the de facto keyboard, the cornerstone of creativity on people's devices. If you are the stickiest app, there's a world of ways to grow."

Perhaps this move can be attributed to the "Something for Nothing economy," as media columnist David Carr points out in The New York Times, noting the difficulty of monetizing products in an age when consumers are accustomed to receiving everything from music to messaging apps for a price tag of zero. 

But SwiftKey seems confident that the "freemium" model, meaning a free app buttressed by paid add-ons, is the way to go. Freemium is widely considered the smartest avenue for monetizing apps, according to a March report from App Annie Intelligence and IDC, analyzing mobile business models. 

The report adds that in-app advertising and the freemium model outperformed paid app models by a wide margin from 2012 to 2013, noting that mobile app revenue will likely increase through 2017. The report also notes, however, that increasing emphasis will be placed on in-app advertising, which means we can likely expect more mobile-app ads in the future. 

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