Report: In-app purchases a strong source of iOS app revenue

iOS app developers who are looking to make big bucks on the App Store should consider using the in-app purchase model, according to a recently published study from Distimo. In-app purchases are a huge source of revenue, accounting for a whopping 72 percent of all App Store revenues.

That number has increased drastically from July of 2010, when only 28 percent of App Store revenues came from in-app purchases. What's even more surprising is that only four percent of all apps are currently using the in-app purchase model.

This all points to a trend of freemium apps dominating the App Store. These, of course, are apps that are free to download and try out, but require an in-app purchase to supply full functionality. Freemium apps made up the majority of the revenue -- 48 percent, or nearly half of all App Store earnings. Many of these apps are games, but comic apps are also starting to create an impact.

TUAW would like to know what your favorite purchase model is -- a one-time purchase that gives you unlimited upgrades and full functionality, or a free download with in-app purchases. Answer our poll below, and if you feel compelled to provide a longer answer, do so in the comments.

How do you prefer to purchase apps from the App Store?
One time purchase	289 (71.0%)
Free download with in-app purchases	118 (29.0%)

View Tags

Source: http://www.macstories.net/news/in-app-purchase-revenue-growi…

Categories

App Store iOS

iOS app developers who are looking to make big bucks on the App Store should consider using the in-app purchase model, according to a...

Add a Comment

Sign in »

4 Comments

Filter by:

alexandra.kwc

Anybody can now make apps even without programming skills. I used http://snappii.com to make apps, it's a very cool service, helped a lot.

September 23 2011 at 2:41 PM Report abuse Permalink -1 rate up rate down Reply

[Po[lentino

To the web developer of this site: the poll got my vote works even if I didn't selected anything.
Radiobutton check_before_submit FAIL?

September 23 2011 at 6:46 AM Report abuse Permalink rate up rate down Reply

Soluble Peter

We included an in-app purchase in our app, "MailShot" (which lets you create groups you can email directly from your favourite apps) to upgrade the free version to full capability, allowing more groups and more contacts per group.

We have had a pretty good adoption rate from customers (over 25% of our free downloaders choose to upgrade,) but we find that the in-app upgrade system still confuses quite a lot of our users, many of which are concerned if they will be charged twice to reinstall or to upgrade two devices using this system (don't worry- you won't be!)

Results have been pretty good so far- each new update has been well-received and numbers still continue to grow steadily 10-20% every months as word spreads, but the most surprising thing for us came when we also released a separate "MailShot Pro" app a few months ago, which was essentially a pre-upgraded version of MailShot. We found that having both options available effectively doubled our daily sales.

its possible that this was because we were now showing up in two different lists, or maybe its because some review sites only cover "paid apps" and now cover us too, but for whatever reason I would suggest that other developers should experiment with this, as well as in-app purchases, as it was certainly a worthwhile experiment for us.

Peter Johnson
http://Solubleapps.com/mailshot

September 22 2011 at 7:09 PM Report abuse Permalink rate up rate down Reply

James Dehnert Sr

Personally, I think Apple is being too greedy with the % take from in-app purchases. To be honest, I haven't seen the option in any of the apps I have. I do recall a few apps changing to remove in-app purchases. I think Apple could afford to take a smaller cut, or better still have a sliding scale that would allow developers with very slim margins. I'm reasonably sure the uptake in volume would more than offset the reduces percentage.

Just an opinion.

September 22 2011 at 4:58 PM Report abuse Permalink -1 rate up rate down Reply