According to iSuppli, they believe that in-app purchases will increase from 39 percent of the total app market revenue in 2011 to 64 percent by 2015. Revenue from in-app purchases is expected to reach $5.6 billion in 2015, more than quintupling from $970 million in 2011.
“Smartphone users overwhelmingly prefer free apps to paid apps, as we estimate 96 percent of all smartphone apps were downloaded for free in 2011,” noted Jack Kent, senior analyst, mobile media for iSuppli. “In 2012, it will become increasingly difficult for app stores and developers to justify charging an upfront fee for their products when faced with competition from a plethora of free content. Instead, the apps industry must fully embrace the freemium model and monetize content through in-app purchases.”
“Games pioneered the in-app business model,” Kent noted. “Now the approach has proven so successful, companies building other types of smartphone app must adopt this strategy if they are to maximize their mobile app revenues.”
Source: iSuppli