This document discusses different business models for making money with mobile apps. It finds that the majority of top-grossing iOS apps use a freemium model where the app is free to download but makes money through in-app purchases or advertising. For premium apps that charge a download fee, it is important to price the app appropriately, promote value through the app store listing, and cross-promote across other apps. The freemium model has a lower barrier to entry and allows for unlimited potential revenue from each user through careful pricing of in-app purchases and ad placements. Both models require focusing on user retention and providing incentives for users to return regularly through new content or virtual goods.

1. How To Make
Money In the
Mobile Apps
Business

2. Quick Overview
Market Recap
Top Business Models
Discovery - Growth Mechanisms
Best Practices for Any App

3. How Many Apps?
 Over 1 million apps in apps stores worldwide
 59.6% of the apps are iOS
 Android is 32.3%, Blackberry 4.4%
 Est. 1,000 new apps added daily to iOS
 Est. 1,400 new apps a day added on Android
market
 Top categories include (By volume of apps)
 Entertainment - 16.78%
 Games – 12.36%
 Lifestyle – 8.02%
 Utilities – 7.13%

4. Where is the Demand?

5. Top Business Models
 88% of top 250 grossing iOS apps are freemium
 Android piracy on the rise, advertising it is!

6. Paid = Premium
Some Aspects of Premium Apps:
Higher retention rates of users
Perception of value is controlled
by price and app store collateral
Revenue is realized only once
Paid apps are costly to promote

7. Premium – What Can You Control
Price Point
Icon, Keywords, Description, Screenshots
App Content
Premium – What Cant You Control
 Placement/Features
 # of installs
 Rating

8. Premium Best Practices
Lower the barrier to entry, make
a free version to drive visibility
Launch with a high price point,
never start with a sale unless you
have built in brand awareness
Cross promotion in all existing
applications

9. Freemium – Free with Strings
Aspects of Freemium
Barrier to entry is low
Lifetime value is revenue
measurement
Potentially unlimited max revenue
from user
Predictable ROI against paid
marketing

10. Freemium – What Can You Control
# of Installs
Icon, Keywords, Description, Screenshots
App Content
IAP pricing, ad placements, frequency
Retention
Freemium – What Cant You Control
 Features/Placement
 Ratings

11. Freemium Best Practices
Never limit how much you will let
people pay
Use Metrics to verify your business
Consumption, sources and sinks
Incent sharing and activity with
virtual goods/other value

12. Tricks to Retention
Incent return behavior/usage
Give reasons to re-enter
Focus heavily on the first minute
of experience
Better to keep people then make
them stay
Measure on day, week, month
and other

13. Mobile Monday Lansing
March 26th 2012
Reference