June 11 (Bloomberg) -- SwiftKey, one of the top-selling apps for Android users, is no longer charging for downloads of its smartphone keyboard, even as it adds new features to predict how you express emotions in addition to what you type.
Starting today, the application created by London startup TouchType Ltd. will become a giveaway for Android users instead of charging $3.99 for a download. In addition to suggesting the next word you’re going to write, the new edition will also propose emoticons -- tears of joy, maybe, or an angry octopus. An Apple version is in the works. To make money, the company will open its own digital store to sell users add-ons like themed keyboards.
While the shift to unpaid may seem unusual for a software program that’s the second-best-selling app in the Google Play store, it shows the pressure developers are under to compete for attention as consumers demand more stuff for free. By dropping its download fee, SwiftKey is following in the footsteps of Moves, a paid fitness-monitoring app that became free after being acquired by Facebook Inc., and the New York Times, which started asking users last year to pay after they download the app and read a few articles for free.
“It is probably the only sensible move,” said Tero Kuittinen, an analyst with Frank N. Magid Associates Inc., a media research company. “It is becoming extremely tough out there for paid apps.”
The idea of letting users download an app for free and then charging them for add-ons -- known as the “freemium” model -- is catching on across the industry, according to a March report from App Annie Intelligence and IDC. The freemium model had the biggest revenue growth last year in key countries, including the U.S., Canada and the U.K., more than tripling from 2012, the research firms said. Advertising grew 56 percent, while paid-app revenue fell 29 percent.
SwiftKey’s pivot to free comes just months before Apple Inc. is scheduled to introduce its iOS 8 operating system, which will open the iPhone for the first time to third-party keyboard apps. That includes SwiftKey and competitors like Swype, which chooses and auto-corrects words as users move their fingers across the keypad. Last week, Apple also announced that it will introduce QuickType, a keyboard that rivals SwiftKey’s predictive typing capability.
With all that competition mounting, going free is a way for SwiftKey to reach more people.
“As we go global, there’s an unwillingness of consumers to pay for an app that they aren’t sure they need,” said Joe Braidwood, chief marketing officer for SwiftKey. By giving the app away, the company can demonstrate to users how much easier it is to communicate with a system that learns how you talk and knows your likes and dislikes, he said.
SwiftKey was founded in 2008 by Chief Executive Officer Jon Reynolds and his friend, Chief Technology Officer Ben Medlock, who has a doctorate in language-based artificial intelligence from Cambridge University, according to the app’s website.
The company doesn’t disclose whether it makes money, said Braidwood, who was the first person hired by the founding duo. Last year, the company brought in venture capitalists Index Ventures and Accel Partners in a round of funding.
The new version of SwiftKey goes beyond predicting the words you want to use by nudging you toward emoticons. Depending on the context of what you’re typing, the keyboard might suggest a smiley face with tears of joy, or one that whimsically blows kisses. Initially, SwiftKey’s paid add-ons will include keyboards with different colors and themes. Eventually, the company may offer a wider variety of images users can type.
Mitchell Stephens, a professor of journalism at New York University, said that while he’s skeptical about the business prospects of predicting emoticons, the app does attempt to fill a gap in communications. A wry smile or a subtle wink to convey irony or modulate earnestness is missing from text messages, Stephens said.
“We slid so quickly from using phone and personal communication that we forget what was lost in that switch,” he said.
People spend an average of almost an hour a day on their phone keyboard, Braidwood said. Users should be able to tailor the experience to their liking, and the app should know what they want, he said.
“We want to be the de facto keyboard, the cornerstone of creativity on people’s devices,” Braidwood said. “If you are the stickiest app, there’s a world of ways to grow.”
To contact the reporter on this story: Scott Moritz in New York at firstname.lastname@example.org
To contact the editors responsible for this story: Sarah Rabil at email@example.com Crayton Harrison, John Lear