Some have compared the current situation in the mobile app industry to a gold rush. Many companies and startups are no longer wondering whether it is worth moving to mobile devices, but are wondering how to create an application that will bring maximum profit to the organization.
Not surprising, since in 2020 the majority of web browsing came from mobile phones, and experts predict this trend will only grow in the coming years. So is the average time we spend on the Internet. Digital 2020’s October Global Statistical Report says it’s almost 8 hours a day! The creators try to surpass each other in ideas of how to draw attention to themselves.
Cost of the mobile app market
According to the analyst firm App Annie, in 2021 the value of the global mobile app market will reach $ 6.3 trillion. If you compare this to the state economy, the country called “Applications” comes in third place – just behind the US and China.
These numbers ignite the imagination and can give the impression that each application is making a big profit. In reality, however, the imbalance in income from these types of products is huge. For example, the top 200 apps generate an average of $ 82,500 in revenue per day, while the top 800 are around $ 3,500. We are talking about “in demand” products, but there are many solutions that do not bring any profit.
Therefore, it is impossible to unequivocally answer the question – how much they earn on average on a mobile application. However, this does not deter companies and startups looking to conquer the market with their innovative solutions. So where is the biggest money and what business models are the giants using?
Games are the undisputed leader in terms of profit
This category generates up to 75% of revenues and 33% of downloads for all mobile applications. But what’s interesting is that the vast majority of gaming profits come from just a dozen companies. The scale of their success can be seen in the number of daily earnings:
- Fortnite, Epic Games – $ 1.9 Million Daily
- Candy Crush Saga King – $ 1.3 million a day
- Pokemon Go
- Niantic – over $ 2 million a day
Most games are free to download, and the real profit comes from buying virtual goods and extensions and displaying ads. However, the mobile gaming market is very competitive – without a great idea and even better execution (supported by reliable marketing), there is no point in making your way to widespread user awareness.
Gaming applications with millions of downloads are created by companies with huge budgets, so consumers expect the highest quality performance from them. However, in order for these types of products to be profitable, they need very active users who will come back to them for a long time. This is why, in addition to high production volumes, these companies also invest in carefully crafted marketing strategies.
Subscription Model
In addition to in-app purchases and ads, subscriptions are another form of earning money on mobile apps. This solution uses Tinder – one of the most profitable apps in the world. The basic version is free, but if we want to have additional features (unlimited likes, super likes, etc.), we must purchase the Plus or Gold extension.
Tinder’s close competitor is Bumble (over 55 million users), which advertises ads under the slogan “More than just dating,” and only allows women to start a conversation. This app also offers two premium features – Bumble Boost (to see who you like) and Bumble Coins (to send Super Likes).
Who else uses subscriptions? This includes Pandora (an app for listening to music), Tencent Video, and iQiyi (for watching movies). Hotspot Shield deserves special attention – an application that allows you to access a private network. This product played a very important role during the Arab Spring, as it guaranteed bypassing government censorship. Currently Hotspot Shield is one of the most profitable apps on the App Store.
Simple Apps Make Money Too
It is worth noting that it is not only complex applications with multi-million dollar budgets that bring profit. Take, for example, Hooked, a chat history reader where, instead of flipping through pages, users tap the screen to see the next text message. As with the solutions described above, you have to pay for unlimited access to content.
The future of apps isn’t just smartphones
Today, due to huge market penetration, apps developed for Android and iOS have the greatest earning potential. What about small players? Of course, less popular platforms can be profitable as well, but developers usually only consider them when the app is successfully running on Android or iOS.
However, the app market isn’t just about smartphones – the popularity of integrated smart devices is growing rapidly. Smart TVs, which are the main platform for Netflix and Hulu, and smart speakers like Alexa and Google Home are great examples. The same goes for game consoles and smartwatches.
It is worth stopping at the latter for a while. According to forecasts, by 2022, the share of smartwatches in sales of all watches will be 51%. Therefore, their optimization can become an important competitive advantage.
Is it worth investing in mobile apps?
Looking at the data on the growth of this market, the only answer is yes. Despite the glut, there are no signs that this business sector will slow down in the near future. Investors and developers are rightly not discouraged by the barrier to entry into the most lucrative type of application – games. There are many examples of how you can make a lot of money with less complex solutions.
