Ask Any Mobile developer: getting users to pay for smartphone apps is not easy - and it's only going to get harder, According To Screen Digest analyst IHS. Developers need to turn Their attention to making money from In-App Purchases, Which it said are on the rise.
The analyst said the freemium business model, where 'apps are free at the point of charge to download But fee for new content, will soon be the dominant smartphone apps business model.
IHS Screen Digest reckons In-App Purchases will rise to account for well over half (64 per cent) of total revenue in 2015 app market, up from just over a third (39 per cent) last year, while revenue from In-App Purchases will swell to $ 5.6bn in 2015, up from $ 970m in 2011. The data comes from STI Mobile Media Intelligence Service.
"In 2012, it Will Become increasingly apologetic 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 embrace the freemium FULLY Must model and monetise content-through in -App Purchases. "
By the end of the third quarter of 2011, free-to-download apps Already close to half Represented (45 per cent) of the top-grossing U.S. iPhone apps, According To IHS Screen Digest, as well as Almost a third (31 per cent) of the highest-earning U.S. Android Market apps. The analyst Calculates That a Majority substantial businesses (68 per cent) of the top-grossing U.S. Some apps featured form of additional content or functionality unlocked by an in-app purchase.
While games Have pioneered the in-app payment model - with virtual currencies Such as poker chips accounting for the largest proportion (63 per cent) of In-App Purchases on the U.S. iPhone App Store at the end of the third quarter of 2011 - the analyst said the approach has Been So Successful That other types of companies building apps need to Get Involved to "mobile app to Maximise Their Revenues."
The next most popular in-app purchase virtual currency after WAS for specific in-game function or features, accounting for around a fifth (22 per cent) of the most popular U.S. in-app sales. Other popular buys include time-limited navigation services, dating and social network access premium, plus specific functions or features for photo and video apps.
Just two per cent of the top U.S. In-App Purchases Were half for additional content or TV Such As video content. Time-limited subscriptions or In-App Purchases to newspaper / magazine content WAS more Successful - in the UK Such in-app buys half Accounted for five per cent of the top iPhone In-App Purchases During The third quarter of last year.
In related news app, professional services firm Deloitte Predicts That as the overall supply of apps Continues to grow the number of paid downloads - app downloads and indeed generally - is likely to shrink. But writing in STI Technology, Media and Telecommunications Predictions 2012 report, the company says this does not mean the app is Fundamentally flawed model - but Rather Reflects the "winner-takes-all" nature of much online content.
As competition Between Increasing numbers of apps intensifies, countries with More mature app Ecosystems are expected to see production and marketing for apps Costs escalate. Deloitte Predicts events produced the apps Most Expensive This Year Could cost millions of dollars.
It's not just getting your app that's going Noticed to get harder, Either - developing apps is going to become increasingly complex as the app and device Becomes more diverse landscape, Predicts Deloitte.
"In the future, the overall market is likely be apps characterised by the co-existence of multiple platforms, countries, languages, genres, manufactures, file sizes and model-specific events application stores. To reach more than 90 per cent of all app users, a developer may need to create versions for five Different operating systems (plus HTML5), five major languages, three Different processor speeds, and four Different screen sizes. In other words 360 variants of a single app may be needed to be created in order to FULLY cover the overall market, "the report said.
Also Deloitte Predicts the feature and capability gap Between top of the range smartphones and more budget $ 100 or less devices will widen This Year - adding to the number of versions of apps developers need to make.
"In 2012, the fastest smartphones will likely offer quad-core processors 1.5-2.5GHz while the growing numbers of $ 100 smartphones is likely to processors with speeds Have 200MHz and 600MHz Between," it said.
