In-App Purchases May Account for Half of App Store Revenue by 2017

According to the latest data from Gartner, in-app purchases (IAPs) will account for 48 percent of app store revenue by 2017, up from 11 percent in 2012. IAP purchases will drive 17 percent of the store revenue in 2013. However, as with downloads, IAP is expected to have strong growth in 2013 and 2014 and …   Read More

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In-App Purchases May Account for Half of App Store Revenue by 2017According to the latest data from Gartner, in-app purchases (IAPs) will account for 48 percent of app store revenue by 2017, up from 11 percent in 2012.

IAP purchases will drive 17 percent of the store revenue in 2013.

However, as with downloads, IAP is expected to have strong growth in 2013 and 2014 and slow in later years.
Gartner says this is due to smart devices reaching more mass-market consumers whose willingness and/or affordability to spend on IAPs is lower than early adopters.

Nevertheless, IAP will become a major monetization method for apps stores and developers.

Research shows that IAP contributes to a significant amount of Apple’s App Store revenue from iPhones worldwide. Other platforms have not reached such high levels as the iPhone, but analysts expect they will also see IAP contributions increase in the future.

“We see that users are not put off by the fact that they have already paid for an app, and are willing to spend more if they are happy with the experience,” says Brian Blau, research director at Gartner. “As a result, we believe that IAP is a promising and sustainable monetization method because it encourages performance-based purchasing; that is, users only pay when they are happy with the experience, and developers have to work hard to earn the revenue through good design and performance.”

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