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, and so is the number of apps. Without doubt, the income generated by the industry of mobile applications beats all records. This tendency makes many startupers and business owners consider going mobile and releasing their own app to make more money. But can you really earn money on mobile apps and how exactly can this be done? Let’s clear this up together.
- Market and competitors
- Monetization Models for mobile apps
- Top ways to make money with an app
- How to determine the price for an app?
- Range of real money making apps
- How much can you make from an app?
- Which platform to choose?
- Cover new fields
Market and competitors
Entering the mobile applications market has never been easier. Today if you decide to create an app and make money on it, you can start from the development of online guides, books and forums for iOS and Android. There are hundreds of small companies, specializing in small one-time orders for the development of corporate and promo apps. Such apps are easy to make and they can be released really fast which, in turn, creates a high competition level. You can only imagine how many companies you’ll have to compete with. What seems like a fast decision will not pay itself off as quickly as you’d want it to.
So you’d better invest in the development of a high quality app. We imply 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 and maintenance. Consider these factors when choosing your developers team and always pay attention to their portfolio. If you are going to make a successful and profitable app, you need a team who has expertise in creating alike solutions.
Monetization Models for 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 and great app won’t bring you any income, but the monetization strategy probably will. Wondering how much can you earn from your app? This depends on a strategy you are going to use. There are two main monetization models to choose from. So let’s take a closer look at each of them.
Direct sale. You’ve probably noticed that there are some premium apps that are unavailable for downloading before you buy them. The only things you can examine first 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, it is possible to do this and Minecraft Pocket Edition is a real proof. It 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.
Wondering what apps are taking the leading positions in mobile stores worldwide? Take a look at the chart below to check out top non-game apps by revenue.
Indirect sale. This model intends to hide the payments inside the free app. So the users can enjoy some basic features for free while needing to pay for some advanced options. This is quite a good strategy as it has more chances to convert your users into customers. They have an opportunity to try out your solution, see its advantages and then decide towards investing in additional features. Below are the ways to make money on apps:
- In-app purchases
- Freemium upsell
- Affiliate links
- Email marketing
- SMS marketing
- Multiple options for payment
- Partnership with another successful app
- Virtual currency
You can also read our article about making money on free apps to decide which monetization strategy is up to you.
TOP Ways to make Money with an App
Taking into account all monetization methods we’ve mentioned above and after analyzing their effectiveness, we can separate 3 top ways that can work for any app. Sometimes it is even better to apply a combination of them. So, without further ado, check out our favorites.
Subscription. If you developed your app, the easiest way to charge users for it is by implementing a subscription. All users who purchased it will be charged yearly or monthly. This is by far the most popular type of monetization and according to statistics it lets app owners earn 50% more money per one use compared to any other type of monetization. From a financial perspective it is a great business opportunity, but from the development side it is quite a complicated task. The thing is that to ensure that your users keep prolonging the subscription you need to offer more and better information, services, etc. Which implies constant changes and updates and you may need a team of creative people to work upon your app further.
You probably know about Tinder’s competitor – Bumble. Social networking platform with around 50 million users. The main peculiarity of Bumble is that only females can initiate a conversation with their match within the app. Bumble has a $9.99 monthly subscription and offers many premium features (like SuperSwipe). It’s approximate cost now is $172 per minute.
In-app purchases. Creating an application with in-app purchases can be a great option to boost your current business or to build a new one from scratch. You’ve probably heard about numerous applications allowing users to buy intangible things that can be used within the app only? It may seem like a childish approach. But in fact it works.
Numerous gaming applications use this strategy for years and make a great deal of profit. Even some language learning platforms resorted to such monetization techniques. Let’s say you learn languages and per each completed level or task you receive a certain amount of virtual coins and can spend it on something within the app. It is a gamification element that can be a powerful money making tool. F.e. you can add something great within your app and make your users buy coins instead of earning them to obtain that thing. It really works!
Advertising. It is a bit complicated and yet effective technique because before applying it you should understand your target audience and offer relevant ads. It requires time and effort but it really pays off. F.e. if you have an app for searching for music, it would be unreasonable and irrelevant to offer your users an add of washing supplies. But if you start advertising headphones or speakers, you may succeed.
Moreover you may benefit from advertising by partnering with other apps or brands. You can charge them for Click Per Impression (CPI) or Cost Per Click (CPC) or ask to promote your app on their resource. What is even better is that you can make advertising a mandatory thing to watch in your app. And to remove the add you can charge some minimal sum. But remember, that this is a tricky thing to do because somehow you may lose some of your users.
How to determine the price for an app?
One of the roughest mistakes your developers can make is to set the incorrect price for an app. If you decided to make your app a paid one, you must think twice, whether it is worth every penny you ask for. Put yourself in the user’s shoes. If someone offered 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?
- Will it be used daily?
- Which category does my app belong to?
- How much do the competitor’s apps cost?
- How many times the competitor’s app was downloaded?
Only after answering these questions can you decide the objective worth of your application.
Always do research and analyze your competitors’ products and monetization strategies. Find all major aspects and compare them. This data will help you to choose the correct monetization model and make your app a financial success.
Range of real money making apps
Once you’ve decided to create an application, the first question that comes to your mind 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.
Of course gaming is a popular industry but not only such apps have an opportunity to become financially beneficial projects. There are way more interesting ideas of popular apps, you can make money on. Here are some of them:
- 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:
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 the “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 was expected to be approximately $521 millions in Q3 2019.
Here are some top Google apps by revenue.
Which platform to choose?
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 the 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 the App Store.
InMobi made a research stating that by 2016 more than 25% of iOS developers earned more than $5000 monthly while only 16% of Android developers reached such a result.
Nevertheless, Google makes everything 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 was 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%.
So as you’ve understood, the amount of money you can earn can depend directly on your decision for which platform to develop your app first. It may seem like an easy decision but in fact it is a tricky one. iOS and Android users have different “digital habits” and prefer one type of activities to the other ones. F.e. if you are a retailer with a successful website and want to expand your business by going mobile, you’d better orient on iOS users because they tend to make online purchases from phones more frequently than Android ones. According to statistics the percentage of Android users making purchases from smartphones equals 38%. While iOS app buyers percentage is 47%.
Cover new fields
Mobile phones are the most popular things nowadays, however you should not forget about other smart devices. What can be a great way to increase the profit of your business? The answer is – making an app for:
- Wearables (smart watches),
- Smart speakers (Alexa, Google Home),
- Video games consoles (PlayStation4, Xbox One, and Wii U),
- Smart TVs (such giants as YouTube, Hulu, Amazon Video and many more already have apps for smart TVs and earn billions of dollars),
If you want to get totally new revenue streams and stand out from your competitors, you should offer more options for more devices.
Making money winning apps is still a good idea in 2020. Mobile internet has become a necessity and people spend plenty of time using smartphones. Now that 5G is coming, the apps will become an inseparable part of our daily lives. As the market becomes more competitive, startupers and business owners need to make more effort while hunting for users’ attention. The more time someone spends in the app, the more likely he will buy something extra within it. Therefore a main task of every developer is to help you create the best engaging app possible. 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 continuous growth – the competition between developers is rather high so the competitors’ analysis is a must before developing an app. So all you really need now is an idea that will explode the app market and professional tech takes by your side!
Just reach out and let’s do it together!