What Make People Getting Charged Apps Instead of Free One?

What Make People Getting Charged Apps Instead of Free One?

Chen-Shu Wang (Department of Information and Finance Management, National Taipei University of Technology, Taipei, Taiwan), Cheng-Yu Lai (Department of Business Administration, Chung Yuan Christian University, Taoyuan, Taiwan) and Shiang-Lin Lin (Department of Management Information Systems, National Chengchi University, Taipei, Taiwan)
Copyright: © 2016 |Pages: 18
DOI: 10.4018/JGIM.2016040104
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Abstract

In recent year, mobile devices have become an indispensable product in our daily life. Extensive amount of mobile applications (Apps) have been developed and used on these devices. Restated, in terms of the Apps future development and popularization, to understand why people have willingness to pay for use certain Apps has apparently became an important issue. However, there are various homogeneity Apps, which people can easily find some free succedaneum for use. Consequently, it would be an interesting issue to realize individual's intention to pay for use the Apps. In this study, the authors conducted a survey in Taiwan to realize individuals' willingness to pay for Cloud Storage Service (CSS), since CSS is one of the frequently adopted App for most mobile device users. The results show that both the perceived service quality and conformity positively affect the perceived value and then increases the user's willingness to pay indirectly. In addition, the findings also support that the users' product knowledge about CSS produce negative moderating effects on the perceived value and the willingness of pay.
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1. Introduction

Considering our daily life, it is all about smart phone and its applications (Apps). Bianchi and Phillips (2005) claimed that people feel anxious without their smart phone. However, as known, smart phone is a carrier device, only content is matter. Hundreds of, even thousands of, Apps emerge and then forgotten by user every day (Garg & Telang, 2013; Kim et al., 2011). For most cases, according to their pricing strategic, these Apps can be simply classified as free in Apps, paid in Apps or hybrid pricing strategic (Oh & Min, 2015). People can install and uninstall any apps they want easily. It is an unavoidable evil that most user will choose a free service to instead of charged one for similar utilities. Ryu (2010) conducted a survey and indicated that iPhone and Android users downloaded around 8 free in Apps and download 5 paid in Apps on average a month. Then, the Market Intelligence and Consulting Institute (MIC) in Taiwan conducted a similar survey in 2012 and indicated that there are 59.1% of smartphone users only use the free in Apps, and more than 40% of smartphone users will use the paid in Apps1. Furthermore, according a questionnaire survey by FIND in 2013 and indicated that 49% respondents are willing to charge to use the paid in Apps2. Their conclusions are consistent with the Distimo3. Unfortunately, according to the survey result of eMarketer for mobile phone user of U.S.A, the purchasing of free Apps (about 66%) is much higher than charged one (33%)4. The pay-willing of user for Apps seems declined but also an interesting finding that the charged Apps are not disappearing. Instead, still some people are willing to pay for charged Apps even there are similar Apps for free. So, why people are will to pay is an interesting and important issue, particular there are similar succedaneum Apps for free.

In this research, we take the cloud storage service Apps as the research target. A typical cloud storage service (CSS) offers online storage space, and enables the users to access the files or documents via sorts of channels. CSS is an appropriate target Apps to discuss the pay-willing because of people need solution similar to CSS enables them to deal with big data problem. User without the need for purchasing expensive software or equipment. Moreover, some CSS Apps charge their user based on usage that provide users with more remarkable cost advantages (Yang & Lin, 2015). The CSS provides an innovative IT paradigm and changes data store and access habit of many users (Wang, 2015). Combing with mobile devices, such as smartphone and tablet, users can convenient store and access files or data they want anytime and anywhere (Kim et al., 2013). In view of this fact, we can expect that more and more people can accept CSS APPs.

More and more IT companies start to engage in the cloud storage market and develop their own CSS APPs, such as Amazon S3, Google Drive, and SkyDrive. For most CSS providers, they offer 2G to 50G free cloud storage space for trial by users and almost all CSS providers enable users to rent a storage space according to their actual requirement and usage. As users need more capacity of storage space, they can extend their disk space from the CSS easily. Table 1 tabulate the features of some well-known CSS providers, such as GoogleDrive, OneDrive and Dropbox. As shown in Table 1, it is an interesting issue and no CSS provider adopt the same pricing strategy.

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