Despite the unprecedented purchases and downloads logged in the mobile app stores of the world last year, the average mobile app generated less revenue per paid app than in 2011.
Vincenzo Serricchio of Research2Guidance says that number of new apps in stores exceeds the demand side.
“This lowers the revenue and may, in effect, lead to a similar development as on the internet where paid content is not anymore a profitable business model,” he writes on his company’s website this week.
According to the data presented, the market for paid application downloads hit $8 billion in 2012 in the top 5 app platforms. If you’re keeping score at home, that’s an increase of 27% over 2011.
But it’s not all sunshine and rainbows in terms of growing revenue. In fact, last year average revenue for paid applications fell from $26,720 in 2011 to $19,560 in 2012.
“As a result, the average revenue of paid applications generated in 2012 is 27% lower than in 2011,” Serricchio explains. “Such a decrease is in line with previous years and could eventually lead to a development where paid apps are no longer profitable. This might lead to a similar situation as the internet one where, in general, paid content has proved to be not anymore a lucrative business model.”
So will free apps ultimately provide a better channel to developer riches than paid apps? It’s starting to look that way. To learn more about the data presented above and alternative methods to monetizing mobile apps, click here.
