In-app purchases to generate more revenue than paid-for apps by 2013
Developers need to focus on the most popular mobile platforms if they are to monetise successfully, according to the president of app developer Bottle Rocket Apps, Calvin Carter. Speaking at the Open Mobile Summit in London, Carter says that developers need to alter their strategy of making their properties available on all screens, as not all of them are important. He maintains that developers should focus primarily on Apple’s iOS as consumer appetite for apps is strongest on that platform, but adds that on Android, Amazon’s Kindle Fire is the leading device for app demand.
“How important are all the different screens? It’s like chasing the horizon when you say ‘I want to be available on all screens’, because most screens are irrelevant,” he says. “I could argue that one of the only screens in tablet size for Android is the [Kindle] Fire. But iOS is still the absolute king in terms of app appetite, and that is how you should be looking at your app monetisation model, because if you go after devices, then why not just build for BlackBerry?“
Carter’s comments are indicative of Apple’s dominance in the market that it helped kickstart and suggests that it is unlikely to be dislodged in the coming years, despite the raft of Android-based smartphones on offer. A recent research note from Asymco analyst Horace Dediu claims that consumers download 48.6 million apps daily on Apple iOS devices, further illustrating the demand for apps on Apple’s connected devices.
More broadly, as app adoption continues, in-app payments are emerging as a key monetisation method for developers. However, Amazon’s Appstore for Android director, Aaron Rubenson, believes that while the process is ultimately lucrative, developers must create compelling offerings to snare revenues.
“If you look at the dollar flow from in-app purchasing for the apps in our store, a small amount of revenue [is generated] on the day of purchase,” he says. “In fact, if you look at the first week, it’s still a relatively small percentage of the revenue that occurs. You need to extend out for multiple weeks from an engagement perspective to take full advantage of the monetisation perspective.”
Overall, in-app purchases are set to generate more revenues than paid-for apps by 2013, according to a report from IHS Screen Digest earlier this year. The research firm claims that in-app purchases will be worth USD5.6 billion in 2015, up from USD970 million last year, with its share of the overall app market rising from 40% to 64% over the same period. Juniper Research goes further, forecasting that revenues from mobile apps will hit more than USD50 billion in 2016, as consumers continue to opt for smartphones and the apps that they offer.
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