How To Estimate The Market Size Of Your App Idea

Partner Post - Promatics Mobile App Development Services

Posted: May 3, 2017

How to estimate market size for your app idea?

Coming up with a new app idea is one of the exciting moments in the professional life of an entrepreneur. We often see them start with great enthusiasm for how it could revolutionize the market.

Before you convert your thoughts into reality, you should estimate the market size for your app idea. Sadly many people are not aware of how to estimate the market size for an app idea.

Why you should estimate the market size of an app? What benefits it can possibly bring? What is the step-by-step procedure to estimate the market size of an app idea? Let’s answer these questions.

Understanding the market size helps you distinguish between the available market and addressable market. Addressable market is the total revenue opportunity for any product or service, while available market is the portion of addressable market for which one can compete. You can develop a product that tackles the customer by figuring the difference between these two markets.

Before you estimate the market size of your app idea, you should see the business horizon. Market size gives you an idea of current trends of the market. As the market movement continues in one direction for a particular period of time, you will get an idea of the actual demand. Once you understand this, you will be able to determine the market size.

Why you should estimate the market size of an app idea?

You are likely to put a lot of resources and time into developing and marketing the app. If you don’t want to waste your time, money, efforts and resources – you should estimate the market size of an app idea. Knowing the audience is of utmost importance in estimating the market size. For a mobile app creator, the accurate identification of target market is especially important. If you want consumers to take it upon themselves to download your app, you need to be sure that you offer what they want.

As the mobile app market becomes more congested, many users are turning away from wide range of apps in favor of those that perform excess functions. You need to figure out who will benefit from the fulfillment of that need. If you take a look at some of the popular mobile apps, they all follow the same pattern. In simplest terms – “A mobile app should be something that makes your life easier, gives valuable information, saves money and at the same time entertains”.

Once you have understood why you should estimate the market size of your app, you should go to the next level of estimating the market size of your app. Go through the steps below to estimate the market size of an app.

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Step 1 – Define and identify your target audience

The key to identify apps target audience lies in the research you do before, during and after the development process. By figuring out who is likely to download your app, you can plan the design and functionality. As you know what their preferences are, you can create a mobile app which they will love.

Once you have identified target audience, you can design the app with them in mind. Doing something that your audience likes might result in a relatively small market, but the people in that group are more likely to install the app and keep it on their devices for significant amount of time. Knowing the target audience is of tremendous advantage, especially when it comes to market the app.

Now, the question is how to identify the target audience?

Identifying the target audience can play a very important role in the success of any mobile app. You will have to gain lot of access to the demographic data, and gather information from small groups as well. Before you determine the type of target audience, make sure that there isn’t an app or program on the market that does same as your app. If there is already an app in the market, your audience is less likely to download your app until it takes the idea to an altogether new level.

Step 2 – Estimate the volume of target audience

Once you have identified your target audience, the next step is to estimate the volume of target audience. Look for companies who have profiles similar to that of your target customers. Use the industry databases to quantify the market. There are various sources which can be exploited to get numbers you are looking for.

Remember that your app idea will not make an impact, if it is not a growing market. Make sure that the volume of your target audience is not shrinking. You can use Google Trends, which is one of the best tools that show if the search volume relating to your keywords is increasing or decreasing.

Step 3 – Determine the circulation of product

Mobile apps are essential for transformation of your experience about an already existing procedure. As the number of mobile apps increase, more and more people tend to use mobiles and mobile apps. Penetration rate of mobile apps is the rate of circulation of any product in specific audience or population. When marketing a mobile app, it is important to understand how consumers behave using different mobile apps and what their preferences are. The penetration rate of the app is a function of the nature of your mobile app. Mobile apps with specialized purpose has low penetration rate. We can assume a penetration rate of 70% for technology based apps. A more generalized app will have a high penetration rate. This metric is important as this will lead you to a very crucial insight.

There are several resources that show the hard figures on how the market is performing and which companies have market share. Some of the top resources to check out are – Euromonitor Australia, Mintel, Passport, Census Data etc. Some resources allow you to download data for free, while some are paid.

Step 4 – Calculate the market size

The next step is to calculate the potential market size of your app. This can be done by multiplying the penetration rate with number of target customers. For example – if the penetration rate is 70% and the target population is 3000, the potential market volume would be calculates as –

3,000 X 70% = 2100

Similarly, one can calculate the monetary value of the market by multiplying the market volume by average value.

Step 5 – Apply the estimated market size

Once the above steps are executed successfully, you need to maximize the effectiveness of the data by putting additional efforts. Examine each assumption you made during the first estimate and check if you can make any changes to the assumptions. Calculate the scenarios on the basis of best case and worst case, besides calculating the expected scenario. Monitor the accuracy of initial assumptions and check if you need to modify them.

The market size estimate is of no use, if you fail to apply it. The size and characteristics of market will help your financial planner determine how best to market his services. Market sizing can be a tedious task, but adds a lot of value to your planning and marketing efforts.


Whether you are interested in developing a gaming app or ecommerce app, the preferences of those who will ultimately download the app are amongst the importance pieces of data you collect during the creation process.

The first essential step is to come up with a good app idea, and the second essential step is to determine if the app idea is going to survive in the market or not. Use this guide first when coming up with an app idea. Being realistic about market size is the most important aspects of determining the market size.

The bottom line is that you should identify target audience and their volume to estimate the market size for an app idea. Identifying the target audience is an important step in making the app successful. Gaining an understanding of the users will have a major impact on apps development as well as advertising method.

Done with the market research and market size estimation? You need a top notch mobile app development company like Promatics Technologies to go to the next step. Rated as one of the top app development companies, Promatics turns your ideas into apps which surpass your expectations.

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