I think I’d recommend someone to get an Eflite Sport Cub 2 UMX. Small, easy to fly, hard to break and with stabilisation and panic button but also with the ability to switch to full manual control.

I think toughness and ease of repair are important considerations, as at the price range it doesn’t seem like offering full spare parts support is expected.

Have you seen the existing Powerup 3.0 app-controlled plane system that lets you convert a paper plane into radio control? This kind of system may be your competition although more simple.

I believe range may be more an issue than you think even with a small plane. I don’t really see any advantage to making the control app based, and the disadvantage is if the app isn’t kept updated as a customer you’re left with a brick after the new version of iOS or Android isn’t compatible. A cheap plane with proportional control by sticks would still be my go to recommendation.

I don’t think it’s a direct comparison with the type of aircraft I imagine, and your idea sounds more like an introductory toy. I think it’s a good idea in that market, but in practice I see this being outperformed by a cheap banggood RTF for similar money and so not a good idea to try to compete directly.