Living in the digital world where we rely on our smartphones for almost everything, there are more than 3 million mobile apps in the app stores today. However, not all of them generate millions of dollars even after having the potential to do so. If you are planning to start a business with a mobile app, you must be wondering- how much revenue your mobile app can generate. Well! The answer depends on several factors such as the platform you choose, the app monetization strategy, the app category & many more.
Research states that the annual mobile app downloads are projected to reach 258 billion by 2022! This means more and more people are using apps. But that’s not a good reason to start building an app for your business. Many things must be taken into consideration before you build & monetize an app of your own. Before you hire the experts of the leading iOS and Android app development Company, you will discover everything you need to know about the money you can make from an app and what are the factors to be kept in mind.
Things to Keep in Mind While Building an App for Your Business
As we know there are millions of apps available in the app stores today but not all of them are successful. Even if you have a killer idea for your app, it’s not enough to gather positive responses from the users. Here are some of the top things that must be considered before developing an app for your business-
Before you finalize the app idea, it is crucial to concept proof of your idea and how your app will help customers solve an existing challenge. Unless your app acts as a solution for users, there is a high chance that it will end up as another app sitting in the app store.
Every app is targeted towards a group of users, which is why you must go through thorough research before beginning the app development process. Knowing the audience that will be attracted to your app idea must be a part of the research, which will help in keeping the focus on marketing your app amongst them.
Never compromise with the security of app data as it may contain your customers’ sensitive information like locations, passwords, bank details, etc. Ensure that you keep security in mind while developing an app for your customers.
Understand the difference between iOS and Android as the platform you choose for your app will have a huge impact on earning potential depending on the differences in market shares, users’ payment capacity & platform popularity at the particular location. Though iOS takes only a 29% share of the world market while Android takes around 71%, iPhone users spend 2.5 times more money on apps than Android users.
Top Models to Monetize Your Mobile App
After finalizing the platform for your app, it’s time to analyze the number of ways on how to make money with apps. Listed below are some of the popular models for monetization of the mobile app-
We will talk about the app type that is available for download from the play store without paying a single penny. The free apps can help you generate money based on the users’ interactions with the advertisements displayed in the app. One of the best benefits of choosing this monetization model of the app is there is a wide range of ad formats that one can pick as per their needs to generate revenue & engage users.
These app types are the ones for which users will pay a one-time download fee and avail all the app features forever. Paid apps dominated the apps world a long time before but the situation has changed today. Users prefer free or freemium app types, which is why developers opt for other monetization models instead of paid apps. The revenue in paid apps is generated through the download rate of the apps. If your business doesn’t find any hurdle to grow a new customer base, go for this app monetization model & set a price to download your app from the play store.
Also known as freemium apps, these apps can be a great choice if you don’t feel like using ads in your app. In easy words, partially free apps are the ones with in-app purchases. This option is preferred by users more than paid apps as they can explore the app content for free and decide after using whether they must spend on app features or not. These apps sell a variety of content such as extra live/ energy in the game, ad removal charges, access to premium content, etc. Though it can be hard to make users choose for in-app purchases, providing them value can help in earning their trust making them paying customers.
How Much Revenue Can You Generate From a Mobile App?
Undoubtedly, we can agree that apps can be one of the most profitable entities today as everyone relies on apps for their daily chores. Not to forget that the global mobile app revenue is increased by a whopping margin of 200% crossing $188.9 billion in 2020 from 2016. This amazing figure is mainly contributed by some of the top gaming apps. The famous gaming app, PUBG Mobile managed to earn a monthly revenue of $146 million in July 2019. The app has gained a huge customer base exceeding over 100 million users across the globe.
Not just PUBG Mobile, there are other gaming apps with impressive figures. One is Fortnite by Epic Games that has earned around $1.9 million/day in 2018. Another gaming app that gained huge popularity is Pokemon Go, which made an earning of $800 million in 2018.
If we talk about the app monetization model, most of these highest earning apps rely on in-app purchases for the whopping figure of earnings. These apps are free to download and use but they come with extra gaming features that require users to pay for them. Research says $71.3 billion is the projected figure of earnings from gaming apps with in-app purchases in 2020. We know that more than 90% of the app revenue comes from the in-app purchases option. If you are planning to build a mobile app for earnings, make sure that you consider the option of in-app purchases to make the most of your app earnings.
Best App Categories that can Generate More Revenue
Before you think of earning from your app, you have to invest in the right development team for the services. If you are worried about the development cost of your app, make use of our smart app cost calculator to get a quick estimate in a few minutes. Choosing the right app category is equally important for the mobile app you want to build for your business. Apart from gaming apps, what are the ones that can help you generate more revenue? Let’s find out in this section-
More than half of the Google Play and App Store revenue i.e. $35 billion out of a total $50 billion generated in the first half of 2020 comes directly from gaming apps only. The monetization strategy used by such games is in-app purchases that enable users to have a higher level of engagement & game skill for better spending on apps.
As many people are becoming health conscious, fitness apps are the ones that are growing tremendously with the evolution of advanced technologies into the healthcare sector. Sweat is one such fitness apps that gained a huge customer base in late 2015 & even earned $100 million yearly revenue.
Another app category that is quite popular among youngsters is dating apps. One app is Tinder that has generated $433 million in spending across both app stores. Though these apps are free to download, they make money through premium services like unlimited swipes for monthly or yearly charges, extra likes, etc.
Talking about online streaming apps, most people prefer entertainment apps like YouTube, Tiktok, etc. through which they can watch video content for free rather than paying monthly cable connection fees. YouTube offers most of its content for free but generates revenue via in-app purchases such as ads & subscriptions.
As you can see, there are many ways to make money from mobile apps but it requires a proper planning and marketing strategy to make your app a complete success. However, ensure that you don’t overuse app monetization ways. Always remember that your customers have several app choices similar to yours that they can choose from. That means, if your app is full of ads and in-app purchases, users may stop using your app and download a similar one.
The first thing that attracts your users towards your app is the great design and if they don’t like the first impression, they are less likely to install and use your app. If you are still not sure how to create an app and make money out of it, get in touch with our experts for the best design and development services. Being a top Android and iOS app development Company, we ensure that every app is developed keeping aligned with the unique business requirements & objectives.