This week the folks at IHS Screen Digest Mobile Media Intelligence Service have shown that given the information they’ve got on in-app purchases for app sales revenue verses in-app revenue, that the latter will be dominating the market in no time. In-app purchases, they say, will rise to 64 percent of the total market revenue for apps in 2015, this up from an already whopping 39 percent in 2011. Revenue itself from in-app purchases will rise to $5.6 billion USD in 2015 from a comparatively tiny $970 million in 2011. Time to fire up those free apps, people!
As this trend continues, it’ll be quickly apparent to app developers that giving away a free application with a choice to upgrade inside that app will be the only way they’ll be able to cash in. The only way, that is, unless they can turn things around with a new way of selling, the same way these current kings of in-app purchases did over the last year. This in-app purchase model is called “freemium,” just so you know.
This freemium model is the fastest growing segment of the global mobile apps business at the moment and will, again, very soon dominate the market. At the end of 2011, again according to research done by IHS, 45 percent of the top-grossing US iPhone apps and 31 percent of the highest-earning US-base Android Market apps were free-to-download. A whopping 68 percent of the top-grossing US-based applications then features some form or another of in-app purchase.
So get in on the party, app creators, of forever hold your insta-pay-once apps in the market with no profit! At least that’s what IHS says.