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Tuesday, January 7, 2014

In-App Purchases By Far Exceed Paid Apps

News just in last week from our friends at eMarketer: Free apps with in-app purchases account for nearly all non-advertising revenues.

In other words ... if your app is available only as a paid version you are most likely missing out on a very large proportion of the revenue that you could otherwise be earning.

We have known this for years, based on anecdotal evidence from our numerous clients - which is why our recommendation is often to release a free limited version which allows for the user to experience the main features of your app without risking being sold a lemon (after all, there are a lot of try-hard and me-too apps on the App Store - both Apple/iOS and Google/Android).

Interestingly, while the Google Play Store (Android apps) has been picking up quite a bit of market share, it's almost exclusively (98%) for apps that are free to download and which then offer in-app purchases. Apple users aren't far behind with 92% of revenue from the Apple App Store being from free apps with in-app purchases. For Apple, that's a 15% increase in 11 months and is creeping ever-closer to 100% for either platform.

The lesson here is to remember to think about how you're best going to earn back the development costs and like any business, it pays to understand your customers' spending habits.

If you have a great idea for an app for iPhone, iPad, or Android handsets and tablets and would like to discuss it with us confidentially to see if it can be done (and how best to position yourself to make a profit from it), give us a shout.