Apple App Store — Are paid apps dead?
28 Oct 2013
As an iPhone developer, if your app is hitting the top-selling charts of the Apple app store, you’d be forgiven for thinking that everything is going smoothly. However, many of the largest iOS app developers have noted significant decreases in downloads and sales, despite maintaining their position in the charts. The top paid apps are now earning just 25% of what they were a year ago, and an ever-increasing number of apps mean that the top chart positions are difficult to maintain. It can be easy for high quality apps to slip down and be quickly forgotten, and with decreasing numbers of downloads, the future for iPhone developers seems less than bright.
However, you may be surprised to learn that total Apple app store revenue is actually on the rise. So, if download figures for paid apps aren’t increasing, where is this money coming from?
Apps for Apple’s iOS would previously look to make a majority of their revenue from up-front purchases, which would clearly be increased by a top app store chart position. However, there appears to be a shift in interest, away from paid apps and towards free apps with extra paid content. This shift could see an end to the ever-popular $0.99 app, although it’s worth noting that more expensive and esoteric apps, like those for the business and finance sectors, appear to remain stable despite their high price, likely due to the specialised services and functions which they offer. However, for everyday users, it appears that this is the end of the road for paid apps.
Over 90% of the products on the Apple app store can be downloaded for free, and over 70% of all free or paid apps now offer additional in-app purchases. You may have heard the news of a child in the United Kingdom who spent over £1,700 while playing a game on his parent’s iPad. Many of the most popular games, like number 9 paid app Candy Crush Saga offer additional items, levels or features for a small extra price. Away from the games market, many apps will also charge to remove adverts, or to gain access to extra features and services.
It appears that in-app purchases, or IAP’s, are set to take over from apps which require an initial purchase to use. Users are given the opportunity to explore the app and ensure it meets their requirements, before investing for extra functionality or entertainment. The significance of this change in consumer behaviour becomes evident when we consider that of the top 100 grossing products on the Apple app store, only nine actually require an initial purchase. IAP’s have produced a massive 76% of all app store revenue this year, casting serious doubt over the future of paid apps.
What do you see for the future of iOS apps? Will the Apple app store remain dominated by free apps which offer extra items or features for money, or will the simple paid app make a return?
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