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Revenue Stream of iPhone Developers going through a transformation

When the first iteration of iPhone was launched in 2007, it was mere a communication device with no intentions of going mainstream as far as mobile applications were concerned. But the next year, when Apple came out with an update to their iTunes and introduced Apple app store to the customers, it opened a whole new paradigm of information sharing in the form of applications. Mobile app developers flocked to the platform, taking cognizance of the fact that mobility solutions were the way for the future.

In the last half decade, Apple app store has become the most grossing mobile platform with over $10 billion in revenue generated so far. What is more interesting is the fact that iPhone app developers have captures over 70% of that value. Due to the fact that Apple has been able to monetize its app store way better than any other platform, developers have preferred it over the rest.

With close to million applications already published in the app store, there has been a huge flux of competition, that has inherited the developers to come out with new ways to keep the revenue stream going. In a crowded App Store which a plethora of iOS applications to choose from, developers find it more difficult than ever to have their apps discovered, much less installed.

While paid apps have been dime a dozen in the app store, the revenue generated from them was becoming more or less stagnated. There was dire need of a more innovative way to keep the revenue stream going. In-app purchases that have been in demand for some time have offered that new scope to iPhone app developer to keep a large userbase and ensure substantial amount of revenues.

Recent reports have given an overview of the money-making mechanism of this model. Last year just half of the revenue from the app store came from in-app purchases which has shot up to nearly 75 percent. The majority of the applications are now following the freemium model where they provide the applications for free and add in-app purchases in the form of enhancements and add-ons. This not only ensures a large userbase for the applications, but also rakes in money for premium access to virtual goods, extra levels, services and upgrades.

The major reason for the success of this model is that fact that putting a price tag on the app itself is something that has loomed a cloud of contention in the minds of developers. Given the fact that Apple’s App Store has yet to implement a “try before you buy” option, similar to Google Play store, where users are offered easy refunds and subscription content trials before buying an application.

The freemium or IAP (in-app purchasing) model has seen a wide acceptance amo9ng the developer community with all the top grossing applications released this year have been freemium applications. Technology is moving at a very fast pace and iPhone apps development is going through leaps and bounds which has made it imperative for the developers to maintain a futuristic viewpoint in order to capitalize on latest trends.

This entry was posted on Monday, April 1st, 2013 at 11:20 am and is filed under iPhone News & Updates. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.

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