blog post 2

How do free apps make money?

Currently, the number of apps in Apple’s appstore has reached 1.25 million, and nearly one third of the apps are free for download. Then how do the free app developers make money? This widely disregarded topic deserves attention given that free apps clearly trump paid in terms of download numbers. The fact is that when developers have apps priced at $0.99, they make a little less money than they do from in-app purchases when it’s free. The other difference is that they can get about 10 times the download number when it’s free.

The freemium upsell is one of the ways that developers make money from free apps. Many free apps have links that users can click that drives them to the “regular” or “HD” version. It’s kind of a feeder system – users can download free apps and get a sense of what they offer, then they can easily purchase the full version (which will have lots more functionality and game play.) The second one is in-app purchases, which allow users to unlock features or purchase more of something, maybe coins in a game like Tap Zoo or gold in a game like Infinity Blade. In this way, it is possible for the developers to drive millions of dollars in sales, even though the app was free. Mobile ads can also help developers generate money. Incorporate mobile ads in apps can even earn much more from advertising than charging users for the apps.

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References:

http://www.forbes.com/sites/tristanlouis/2013/08/10/how-much-do-average-apps-make/

http://www.bluecloudsolutions.com/blog/5-ways-free-apps-money/

http://blog.smashapp.com/2011/06/15/developers-how-to-earn-money-from-your-free-mobile-app/