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In-Store App Purchases: Where Mobile Meets the Money
In-Store App Purchases: Where Mobile Meets the Money
By Jennifer LeClaire / NewsFactor Network Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
SEPTEMBER
19
2013


(Page 2 of 2)

Gartner research also shows that IAP contributes to a significant amount of Apple's App Store revenue from iPhones worldwide. Other platforms have not reached such high levels as the iPhone, but analysts expect they will also see IAP contributions increase in the future.

"We see that users are not put off by the fact that they have already paid for an app, and are willing to spend more if they are happy with the experience," said Blau. "As a result, we believe that IAP is a promising and sustainable monetization method because it encourages performance-based purchasing; that is, users only pay when they are happy with the experience, and developers have to work hard to earn the revenue through good design and performance."

We asked Greg Sterling, principal analyst at Sterling Market Intelligence, for his take on the research. He told us there's considerable historical data that free apps are downloaded more often and in greater volume.

Still, he doesn't have any view on whether the precise percentages in the forecast are accurate. He said often forecasts such as this are based on a set of abstract assumptions of growth and can be inaccurate. But the idea that users will be more inclined to pay for things within apps -- after they've had an opportunity to use the apps for a time -- is sound, he said.

"Provided there's some obvious value to end-users, developers can drive in-app purchases and generate revenue more effectively," Sterling noted. "Unless there's already a brand or existing value established, such as Hulu and the New York Times, exposing a consumer to a free app with a higher-value paid version can be a more effective strategy than seeking to charge out of the gate."

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