We all love free stuff right? Well, would you have ever guessed that free apps are also some of the largest grossing in the App Store? That’s right. Due to what’s being called the “freemium” business model, such apps have been flourishing thanks to in-app purchases.
According to Gigaom, about a third of the top-grossing iPhone apps are using that exact “freemium” model. What that means is that today 34 of the top 100 apps are free, but they actually make their money through in-app purchases via virtual currencies and other features. Remco van den Elzen of the analytics firm Distimo feels that in-app purchases are starting to make up a good chunk of App Store profits. “We’re seeing more developers implement more in-app purchases especially with games,” he notes. “Freemium Apps are also picking up significantly. A lot of developers realize it’s a successful model.”
Just the same, freemium apps still make up a small percentage of the App Store world. Distimo thought that the percentage of free apps with in-app purchases had jumped from 1.10 percent in the second quarter to 1.34 percent in the following quarter.
As Gigaom later noted, free apps don’t always exactly work in every category. While consumers certainly enjoy a free experience, they don’t exactly want to feel left out in the cold if they don’t want to spend any money.
With that readers, do you find yourself utilizing in-app purchases more and more? Do you think it’s a good business model versus making consumers pay for an app outright? Feel free to leave your thoughts below