Software Developers Anticipate Challenges Monetizing Apps

January 29, 2014 - 2 minutes read

app monetization

Making real money from a mobile app is already challenging, but industry insiders predict that it is going to get even harder in the years ahead. Current trends indicate that by 2017, 94.5 percent of all mobile downloads will be available to end users free of charge. Analysts also anticipate that as little as 0.01 percent of all apps will become financial successes for their mobile app developers.

The single biggest factor driving these trends is the sheer number of apps available. Though the mobile software market offers endless possibilities and defies traditional concepts of market saturation, there are currently more than one million apps available to both iOS and Android smartphone users. As a result, more and more users are seeking easier, less time-consuming ways to find mobile software, including:

  • App recommendation search engines
  • Advice from friends
  • Information from social media and social networks
  • Advertising

Monetizing apps becomes even more challenging when you consider that the vast majority of pay apps have free-to-download alternatives. In 2013, 91 percent of mobile software downloads were free. As mentioned, that figure is expected to grow steadily in the coming years.

So, if you’re a mobile app developer in Chicago looking for an edge in the marketplace, what do you do? Experts point to the importance of in-app monetization as a key software development strategy. In essence, this approach generates revenue through in-app purchases (IAP) rather than through paid downloads.

Trends show that the IAP model is gaining traction. In 2011, just 11 percent of app revenue was generated through IAP, but by 2013, that figure spiked to 17 percent. Insiders predict that by 2017, IAP models will account for 48 percent of app revenue generation.

With fewer paid apps poised to make money in the years ahead, IAP will become increasingly crucial in the years ahead.

Tags: , , , , , , , , ,