Good strategic decisions rely on good data, or at least logical data. I can’t help but think the extrapolation in this article is misguided and overstated:
…a survey by apps company AppsFire has found the average owner spends $US80 on apps for their iPhones.
Multiply this by the 45 million owners across the globe (and adjust for the 7% of users who prefer to only use free apps) and the market is worth a whopping US$3.3 billion, the company says.
The scope for multiplicative errors here is enormous. If the average spend is even 20% less (and I suspect is substantially less than that), and the percentage of users who prefer to only use free apps is 10% (again, I suspect it is much more), this market would only worth $2.6 billion.
The datasource here is very weak (1200 users) and sample representativeness highly dubious.
Firms should avoid such overt optimism wherever possible. A good strategy considers the worse possible (yet reasonable) external environment, as well as the best.