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Monetization of Mobile Apps

By July 20, 2018December 11th, 2023Mobile Apps
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Mobile apps become profitable when coupled with a strategic revenue model. There are multiple variations for the right pricing structure. These applications are extensions of your business and the most helpful approach to connect with a worldwide stage of users. Thus, it’s ideal for Android developers and iOS developers to evaluate the pricing trends for mobile applications. It’s actually one of the biggest challenges for all developers to find a suitable way to monetize their product.

The app market has been consistently booming, so you as a developer need to be strategic when it comes to launching the product to ensure that it gives profitable outcomes.

Global mobile apps revenue  2015, 2016 and 2020 in billion US Dollars

Share of global mobile app revenues from 2011 to 2017, by channel


Monetization Model:

A portion of the best strategies for adapting an application is mentioned further. There are four common estimating procedures which are free, freemium, paid and paidmium. It’s important to apply a reasonable cost to your application since clients/users as of now have seen a wide range of them and are looking for something genuinely extraordinary. Therefore, you have many factors to consider when selecting the pricing course and understanding the user’s behavior habits.

Free App: Customers love free stuff!

Free applications may not sound well to designers, but rather it is one great approach to create a ton of income. Particularly on the Android stage, free applications are significant. However, these applications accompany irritating advertisements and highlights to create income from different sources. First off, this could be a decent start. Be that as it may, once you’ve achieved your edge, it is best to go paid.

The overall selling price of applications, across different stages, has been declining reliably. The significant reason is the increase of rivalry and competition. Though, another vital reason for this is the decrease in cost is the alternative revenue streams available for developers. Rather than charging an up-front, flat fee for apps, developers have started spreading the message of revenue generation across the experience of using an app, especially with in-app purchases as well as in-app advertising.

This classification represents the applications for which users need to pay once only for download, after that the user is free. But their popularity is somewhat low these days, due to the expansion of the free and freemium applications.

As per the experts from various mobile app development companies this model is said to be the least successful. However, for certain business applications, it’s still a chosen pricing strategy. Only it’s wise to keep in mind that if you absolutely must put a price on your App, make the charges as low as possible.

The opposition available for paid apps is super close, you won’t have any desire to wind up at the base of the rank. Remember that the higher a price tag is, the higher will be the desires from an item being sold. However, the price may scare off a part of prospective clients. Also, if the paid app delivers a lower performance than expected by most of the users, it’s doomed to get tons of bad reviews and ranks.

Freemium Apps:

Freemium stands out amongst all the other and is the most well-known techniques for monetizing an application and it is additionally said to be the most profitable pricing strategy for apps. This empowers a user to download your application for free, yet pay for extra functions if they decide to get more access to the features of your app.

Freemium is really a special case of the variable price subscription, where one of the subscription options (with the least features, capacity or users) is free.

Although this pricing model is fashionable, it’s only recommended if you know your numbers and margins inside-out. Freemium is an advertising strategy and is just a sensible approach if the regular average profit is as per each user (including paid and free users) outweighs the equivalent marketing cost to attract those paid customers. Consider the freemium strategy if the following conditions are met: (a) highly competitive market, or is a service that people don’t realize they need yet. (b) It is likely to yield long-term retention rates. (c) It increases in value for the user over time, for example by storing an increasing amount of the user’s data.

Paidmium (Paymium) Apps:

As the name says, it is a blend of paid and freemium procedures, coordinate deals with in-application buys that is direct sales. One of the latest pricing models, still emerging, where customers have to pay for the app, however then there is a choice to buy extra functions and highlights by making further payments. This strategy provides for owners a tangible ongoing money stream in comparison to the paid apps.

There is a promising potential for new income and profit streams. This model may work pleasantly for music, social media, and maps, and route applications. However, to gain a strong user base, app designers must stay up with the latest technology and provide unique useful features, subscriptions, and innovative functions. It obliges the developers to stay creative when it comes to ensuring new ways for attracting users and pursue them to pay more within the app. However, users may find these product double taxing and with low-quality content. Apps with this strategy require constant marvellous updates which take a lot of time and efforts from developers.

Which model is the best for your app?

Depending upon the monetization model you pick that determines the price of your application, it can either make or break your app. Adapting to the model chosen, your applications would require strategic planning to make your chosen model work and the functions of your app to be admirable and appealing to help your application to gain positive income and revenue.

The value of your application will decide if it would be a business that could be grown and further generate profits or is just a diversion that would simply be a craze. By deciding the best model will be able to feature the app’s functions well and thus you can unlock a very good source of passive income.

Most application designers want to test their applications for free to a few people, to begin with, before propelling their applications. That way, clients can recognize what’s in store for them, before purchasing the full application or making some in-app purchases.

Points to keep in mind before choosing any app monetization method:



Your model is dependent upon who will be using your product. So you need to decide if your goal is to maximize the adoption of revenue. Lastly, when you do a good job of segmenting your audience, you can successfully manage multiple revenue models.

In the final statement, the future level of apps revenue will depend on how fast such cutting edge technologies as the Internet of Things technology (IoT), Augmented Reality (AR) and Virtual Reality (VR) will be evolving and their adoption rate.


Raj Sanghvi

Raj Sanghvi is a technologist and founder of BitCot, a full-service award-winning software development company. With over 15 years of innovative coding experience creating complex technology solutions for businesses like IBM, Sony, Nissan, Micron, Dicks Sporting Goods, HDSupply, Bombardier and more, Sanghvi helps build for both major brands and entrepreneurs to launch their own technologies platforms. Visit Raj Sanghvi on LinkedIn and follow him on Twitter. View Full Bio