Did you know Apple made $4 Billion from its app store in last year. Each January, Apple issued a press release (conveniently scheduled for mid-CES) income that developers have made from their App Store. In 2014, developers was paid more than $10 billion to developers (source Lifehacker) – an impressive figure, but one that should not blind us to the fact that making money from applications remains very difficult.
Apple has a cut of 30 percent, which suggests that the total revenue from the App Store – covering both applications and in-app purchases – which were around $14.2 billion. (In 2013 the figure was $10 billion.)
In the first week of January 2015, customers spend half a billion US dollars on applications and in-app purchases.
There are now 1.4 million apps in the App Store, including 725,000 who were “made for iPad”.
The vast majority of applications do not actually make money. Most applications are given for free. In addition, research suggests that most of the income of applications in the App Store comes from in-app purchases, no sale of the applications themselves.
Apple did not disclose how many free and paid apps were downloaded in 2014, but the figures do provide further demonstrate how difficult it is to really break through and make money in the applications market. If there are 1.4 million applications and a pool of $10 billion of money for developers, then the average revenue per application would be about $7142.
According to Microsoft’s Windows Phone developer blog in November for 53 percent of revenue for developers comes from advertising, 35 percent of in-app purchases, and 11 percent of sales from applications. Amounts paid to individual developers would be higher for in-app purchases that for advertising.
Windows Phone is a minnow compared to Android and iOS, but the lesson seems clear across all platforms: people want their apps should be free, but then give money for added extras or putting up with the ads. If you are building a new application, it seems the only sensible path to take.