IOS In-App Purchases Hits Record High

March 28, 2013 - 2 minutes read

Any regular user of Apple’s IOS platform is likely to bear witness to the fact that in-app purchases are becoming more common place.

A new report confirms they are at a record high with over 76% of iPhone App Store revenue in the U.S. orginating from in-app purchases. Around a year ago this figure was just 53%.

The popularity of these purchases does vary by region however with Asian in-app sales leading the way with up to 90% of revenue in some areas. These findings are from the latest report from app store analytics firm Distimo which took a look at the 800,000+ apps available for IOS devices.

They found that the majority of apps use the “freemium” model where the basic app is free but advanced features need to be purchased. The top grossing apps in February 2013, all were freemium apps.

The report looked a statistic called ARPD (average revenue per download) which compares the apps ability to generate money from a download.

The ARPD is calculated by dividing the sum of all revenue generated by apps together by the sum of downloads of all apps in a group that share the same business model.

Interestingly enough it appears that paid apps with in-app purchases generate more revenue per download. In other words, users are not put off by the fact that in addition to the one-off fee they already paid for their app, they also have to pay for additional features in the app.

These figures do not take into account the cost of that download to the application publisher which will be significantly higher for a paid application than a free app.

Dogtown Media is a disruptive iPhone app developer with expertise in project management, design and marketing. A specialist in iPad app development Los Angeles, DogTown will guide you through the twists and turns of app development.