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How Much Money Can You Earn With an App?

a frog with a green money bag

The market of mobile applications grows by leaps and bounds. This huge industry is expanding every day and does not seem to stop. The army of developers is constantly increasing, a number of apps and downloads flourishes. Therefore, the income generated by the industry of mobile applications beats all records.

The reasonable question is: how to create an app and make money on it?

Market and competitors

mobile development market

Entering the mobile applications market is very easy today. If you decide to create and make money on an app, you can start from online guides, books and forums on iOS and Android development. There are hundreds of small companies, specializing in small one-time orders for the development of corporate and promo apps. You can only imagine the competition among these companies.

But when it comes to the professional development of apps for large businesses, that’s a different story. We talk about long-term projects with millions of users in different regions. To create such an app you need the experts in coding and UX, whose infrastructure is capable of conducting complex integration with all clients’ systems and who can provide technical support. Consider these factors when choosing developers.

 

Earning money on mobile apps

So you created a perfect app that was downloaded by thousands of users over the first month, but wait. Where is the money? Your brilliant idea won’t bring you any income, but the monetization strategy for apps probably will. Wondering how much can you earn from your app? Depending on the strategy. 

Monetization Models for mobile apps

Direct sale

Premium apps are unavailable for downloading before you buy them. The only things you can examine are the description, video, screenshots, and reviews. Convincing the user to download the paid app is a tough task so all the available materials must be very seductive. 

Nevertheless, Minecraft Pocket Edition is the biggest money making app in Google Play. Being launched in 2011 at the cost of $6.99 it became the most frequently downloaded game on Android.  

most profitable applications

Source: sensortower.com.

Indirect sale

This model intends to hide the payments inside the free app. Below are the ways to make money on apps:

  • Advertising
  • Sponsorship
  • Push-notifications
  • In-app purchases
  • Freemium upsell
  • Affiliate links
  • Email marketing
  • SMS marketing
  • Multiple options for payment
  • Partnership with another successful app
  • Virtual currency

You can read our article about making money on free apps.

How to determine the price for an app?

iPhone X_silver

One of the roughest mistakes developers make is the incorrect price of an app. If you decided to make an app paid, you must think twice, whether it was worth every penny. Put yourself in the client’s shoes. If someone proposed you this app for this price, would you buy it? Before putting a price tag ask yourself a few important questions:

  • Which features does my app have?
  • How much do the competitor’s apps cost?
  • How many times the competitor’s app was downloaded?
  • Which category does my app belong to?
  • Will it be used daily?

Pro tip: as soon as you answer these questions, analyze your competitors. Find the main aspects and compare them. This data will help you to reach success.

Range of real money making apps

Once you’ve decided to create an application, the first question that comes is which app to develop? You can start with what you like or think will be in demand. But first, you should study the market. The Liftoff company made our lives easier by publishing report that confirmed games to be the leader among all the apps, generating about $34,8 billions of income annually.  What games are more popular and interacting? Action, arcade, strategy? Research names the leader – card games.

Ideas of popular apps, you can make money on:

  • Personalization apps (launchers, icons, background images for the main screen and the lock screen, etc.)
  • Mobile versions of magazines and newspapers
  • Performance Tools
  • Shopping apps
  • IoT applications
  • Sport, fitness, health and travel apps
  • Social media apps

Most of the mobile app usage time is spent on such market segments as social networking and music applications. Here’s how the distribution of time looks:

share_of_mobile_app_category_time_spent

Source: comscore.com

How much can you make from an app?

A mobile app can be a good business if you do everything right. Maybe you are asking yourself a question: How much money do apps make? For example, incomes of Supercell who developed “Clash of Clans” game, are about $1,548,536 per day! King Digital Entertainment, the publisher of “Candy Crash”, earns $72,227 per day. Most of the game apps are free and monetize via in-app purchases or advertising.  

The revenue of Match Group, the developer of Tinder is expected to be approximately $300 millions in 2017.

Which platform to chose?

Picking the correct platform for your App is very important. Apple and Google have the largest and the most popular app markets. Comparing iOS and Android platforms, the CPI (cost per install) in App Store is 60% higher than in Google Play. CPR (cost per registration) – is 73% higher and CP-IAP (cost per in-app purchase,) – is 30% higher in App store.

InMobi made a research, by which 55% of developers earn less than $1000. Moreover, the third part of apps didn’t reach even 10 000 downloads. By 2016 more than 25% of iOS developers earned more than $5000 monthly while only 16% of Android developers reached such result.

iOS and Android users spending on apps

Source: statista.com

Nevertheless, Google makes everything possible to stay competitive to the Apple’s App Store and reduced the Google Play developer fee for subscriptions. Generally, for all the in-app purchases and subscriptions, Google charges 30% of a price as a transaction fee.

But the rules are changing in order to encourage developers to create apps that are engaging and making money. Starting from January 1, 2018 the transaction fee will be decreased from 30% to 15% for those subscribers, who retain for more than 1 year.

These changes are caused by Apple’s new policy presented in 2016, to sell subscriptions as in-app purchases, that has also reduced the fee from 30% to 15%.

What users say: "Both from the user's and developer's sides I find this change to be a positive one. It's a pity, only so long-term subscriptions receive such a discount. Unfortunately, the majority of the users don't purchase subscriptions for such a long period. Monthly payments make it easier to give the product and switch to an alternative one if there is such a possibility or necessity."

Conclusion.

As you see, “making money creating apps” is still a good idea in 2018. Mobile internet becomes the necessity and people spend plenty of time using smartphones. Therefore, developers are constantly hunting users’ attention. The more time someone spends in the app, the more likely he will buy something extra. Moreover, since the main app markets decreased their fees for long-term subscriptions (more than 1 year), developers have to work even harder to retain their users for such a long time.

As the mobile apps market experiences the continuous growth – the competition between developers is rather high so the competitors’ analysis is a must before developing an app.

If you have an idea that will explode the app market, you are in the right place! We are experts in mobile development and even have a special crash test for apps!

Just reach out and let’s do it together!

Elena is the business analyst passionate about everything connected with startups, business ideas, and analytics. She’s aiming to find the solution for every challenge, young companies meet on their way.


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