A new report from ABI Research says the trend towards ‘freemium’ pricing on mobile apps will continue next year. The term refers to a product that’s offered free with a chargeable option for customers who want additional features or enhanced functionality. Apple enabled in-app purchasing for free apps just over two years ago.
ABI Research says 88% of the 250 top-ranked Apple iOS apps across all categories worldwide are free to download and are monetised with advertising and in-app purchases. It forecasts that all iOS apps may end up being free in certain categories next year.
Revenue varies between countries and between different app categories. In Germany, 17% of the top iOS apps are still paid - but that figure falls to around 5% in India and South Africa.
Aapo Markkanen, senior analyst for consumer mobility at ABI Research, said “What many observers misunderstand about freemium is that it isn’t only about monetizing, but also about marketing. The threshold for consumers to download free apps is really low, so more people end up using and recommending them, which then also gives those apps a bump in distributors’ ranking systems. This means that paid apps fail to draw attention in the first place.”