THE majority of people do not want to pay for mobile apps up front but are more likely to spend money ‘within the app’, according to a new report.
As increasing numbers of people and businesses launch apps, the ones which will make the most money in the long run will be those that are free to download but then offer ‘in-app’ products to buy.
The report, which has been compiled by the mobile team at technology analyst firm Screen Digest, predicts that in-app purchases will rise to account for 64pc of the total app market revenue by 2015, up from 39pc in 2011
Revenue from in-app purchases will increase to $5.6bn in 2015, up from $970m in 2011. The report estimates that 96pc of all smartphone apps were downloaded for free in 2011.
“In 2012, it will become increasingly difficult for app stores and developers to justify charging an upfront fee for their products when faced with competition from a plethora of free content. Instead, the apps industry must fully embrace the freemium model and monetize content through in-app purchases,” said Jack Kent, senior analyst of mobile media at Screen Digest, who authored the report.
So far in-app purchasing has been pioneered by games apps, such as Angry Birds, allowing players to pay extra for additional features and levels, once they have downloaded the app for free.
Kent said: “Games pioneered the in-app business model. Now the approach has proven so successful, companies building other types of smartphone app must adopt this strategy if they are to maximize their mobile app revenues.”
There is still only a very limited way to trial a paid-for app prior to purchasing it – which may also put many people off in the long run.