Consumers' spending on apps continues to spiral year after year. Google play store generated 11.2 billion U.S. dollars and Apple App store generated 24.6 billion U.S. dollars in revenue.
However, that's a pretty skewed statistic to determine whether your app will generate income.
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| How Much Can Startups Make With Mobile Apps?: eAskme |
There are 5 Million plus apps in the market, and most provide little to no value to users.
Of the 1.68 million apps on the Google play store alone, over 1 million are low quality.
Besides, the app market revenue is concentrated in a few niches and among a few app giants.
Let's examine a statistic. Consumers spent $41 billion on mobile games in the first half of 2022. The top 5 gaming apps got a whooping $4.6+ billion share.
That's almost a fifth of the entire gaming market! This revenue generation disparity is similar in many other niches..
The top ten entertainment apps, including TikTok, Instagram, and Facebook, generate more revenue than the rest of the market.
As evidenced, apps generate lots of money but only for the top dogs. As a newbie with a brilliant app idea, your question could be, "can my particular app idea be monetized?
If yes, how?"
A way to get prompt and accurate answers in consulting mobile app development companies.
Emphasoft, for example, analyzes the viability of your app concept, how you can monetize it, and the potential profit it can generate.
But before contacting them, you could do with some insights.
What Does The Mobile App Market Statistics Say?
Gaming apps were the highest-grossing apps in 2022. Tencent's Honor of Kings, PUBG, Genshin Impact, Candy Crush Saga, and Roblox make up the top 5.
Among non-gaming apps, entertainment apps are the highest-grossing. TikTok, YouTube, Tinder, and Google One are the top 4 non-gaming apps.
There are over 2.8 million apps on Google Play Store. Apple Store has 2.1 million plus apps.
According to Sensor Tower's 5-year market forecasts, total consumer spending on the app market will reach $233 Billion in 2026.
What Should You Consider Before Creating An App That Makes Money?
No doubt, a software startup can generate lots of money. But its market competition is also high.
Thus, you must create the best quality products to stand out in the market. Otherwise, your app turns out low-quality and gets discarded.
That's why in-depth market research is noteworthy, as it decides the future of your application. You can always do good research yourself.
But seeking technical expertise gives you more accurate insights. In that case, mobile app development outsourcing can help.
When conducting your research, it's essential to analyze these crucial factors.
Solution That Your App Solves:
You can't make money from a brilliant app idea until it solves humanity's crucial problem.
People only pay for what benefits them. To understand your app's solution, ask the following questions.
What crucial problem does my app solve?
Which category of people will need my services, ie. Duolingo has a massive market among ESL students.
Which monetization strategy best suits them
Which software development company will help me build such solutions?
By aligning your consumer pain points with your app's purpose, you understand whether such a solution will be successful says Slava Vaniukov, expert and CEO of Softermi.
Thus, you can choose the right monetization strategy.
Who Are Your Potential Customers?
Understanding your consumers' purchasing patterns may help you choose the right monetization strategy.
Before building your app, you should understand its caliber, age group, gender, or demography.
Good consumer research makes you choose the right monetization strategy.
For instance, apps like AutoCAD can make money through purchases.
In comparison, users won't pay to buy apps like Todoist. So their only source of income is through free downloads. Without research, how do you find out?
Who Are Your Competitors?
Getting crucial insight into competitors is non-negotiable when building a successful app.
You can detect similar applications launched in the past, why they became successful or failed, how much profit they have made, and their competitive edge.
With competitor research, you'll know whether the market is saturated. It also helps you detect loopholes in their system.
You can determine the decisions to make and draft a better monetization strategy.
You can also capitalize on their weaknesses, provide a better solution and get a huge customer base in no time.
Technological Feasibility Of Your Idea:
To build a first-of-its-kind solution, you must study the idea's technical feasibility.
Can your potential solution be translated into a functional application?
What monetization strategy suits such a solution?
Otherwise, you may need to introduce new technology.
New technologies could simplify tasks and boost user experience, giving you a competitive advantage against similar applications.
For instance, a retail store can leverage beacon technology to help customers locate products in the store.
A SaaS platform can introduce Sign in With Ethereum (SIWE) to limit users' disclosing personal information when signing in.
It's worth knowing, though, that you shouldn't introduce new technologies just for their sake. Ask whether it brings innovative ways to solve problems or add to your app's processes.
Which Operating System Platform Will You Use?
Android and iOS had formed a duopoly. And it should be the primary focus of developing software for startups.
When starting a software company, you must determine whether to make your solution for iOS, Android, or as PWAs.
Keep in mind that consumer needs and budget could heavily affect your decisions.
Are you developing native apps or Progressive web apps? Your choices could determine your app's functionalities.
Which, in turn, determines whether customers will pay for your solution.
Sometimes, you may choose to exploit other less-known platforms. Such untapped markets can be lucrative places to make money from your apps.
Alternative platforms include :
- Windows OS for Mobile
- Kai OS
- Graphene OS
- Sailfish OS,
- Ubuntu Touch.
What Monetization Strategy Fits Your App Solution?
There are many ways to charge users for your app.
A great application, quality solution, and the right monetization strategy guarantee you make money from your app.
They include:
Premium Applications:
Users pay a fixed one-time fee to download premium apps from Google Play Store or App store.
However, people think that paid apps can't generate enough money because users don't want to download them.
This notion is misconstrued.
According to statistics, paid apps grossed up to $250 Billion in revenue in 2017. Examples of paid apps include professional and educational apps.
For instance, PhotoPills is a professional app that helps video and photographers shoot videos and take pictures. Charging $10.99 for downloads, the paid app grosses between $100,000 to $5 Million annually.
Subscription Apps:
This monetization strategy works best for Software-as-a-service (SaaS) apps. Users pay a recurring fee, either monthly or yearly, to access a service.
Unlike premium apps, this software is free to download but usually requires payment to access its service.
Sometimes, free features are available, while a fee is attached to advanced features.
Entertainment services are SaaS platforms and are the best models for subscriptions.
They include apps like Netflix, Spotify, Amazon Prime Video, and Pandora. For instance, Netflix generated more than $29 million in annual revenue in 2021.
Freemium Applications:
The freemium model is another great model to consider when monetizing your app. These apps are generally free to access.
However, users have to pay money to buy in-app properties. It could be a gaming character, tokens, or blocking ads.
Freemium Applications work best for gaming platforms. Usually, these games are free to enjoy. However, users have to pay money to access specific in-game properties.
In-app Advertisements:
This monetization strategy gets money through ads posted. These ads could be videos, texts, banners, etc. Per in-app ads, appreneurs can earn as high as $10 on average.
Although Ads mean users can access every app feature for free. However, it could affect users' experience and deplete user retention.
What Type Of Apps Generates More Income In 2024?
All apps aren't the same. Some niches are more adopted, thus, generating more income than others.
Gaming Apps:
Gaming apps have a knack for being immersive.
Users can enjoy hours upon hours of games without getting bored. This boosts app time usage and user retention.
The statistics don't lie, either. MediaKix's study shows that 56% of mobile gamers play games more than ten times per week.
For mobile game developers, increased usage means more profit.
The AR-enhanced game Pokemon Go grossed over $3 billion in revenue in 2019. The honor of Kings was the top game in the first half of 2022. It grossed $1.1 Billion.
Even if you're not developing mobile games, you can gamify the app experience for your audience.
A language app, for example, can introduce language games. It helps users test their knowledge and potentially win tokens to open new app features.
By playing games, users spend more time on your app, which means more revenue generation.
E-commerce Apps:
Although growing, COVID-19 ramped up the growth of e-commerce apps.
Millennials and Gen Z now prefer buying things online.
This is evidenced by the growing popularity of e-commerce platforms – Amazon, Alibaba, eBay, and Wal-Mart.
For store owners, building e-commerce applications for customers is a way forward.
Other types of apps generating income in 2024 include
- Dating apps, i.e., Tinder and Bumble
- Entertainment Apps, i.e., TikTok, YouTube, Spotify
- Health and Fitness Apps, i.e., Strava,
Introducing New Technologies To Your App Idea:
Another way to advance your app idea is by introducing new technologies. Let's take a look at some examples.
Internet of Things: By 2025, the IoT market will be valued at around $2.48 Trillion
- Wearables
- Artificial intelligence
- Blockchain technology
- Beacon technology
Find out more
Conclusion:
Money-making opportunities abound in mobile app development.
The app market is showing steady growth as adoption increases. The odds are that you can make money from mobile app software development.
However, you have to get the basics right to create money-generating apps.
It includes adequate market research, creating an unparalleled product, positioning yourself in the market, and using a suitable monetization strategy.
To fast-track your app's success, you may need professional insights.
Mobile app development agencies like Emphasoft offer adequate consulting and provide quality software development for startups.
If you still have any question, do share via comments.
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