According to market research firm ABI Research (News - Alert), the rapid growth in mobile applications has spawned a number of different revenue models. However, none of these have become the norm yet for most developers. But, paid apps and in-app purchases are rising, and ad-supported models are gaining momentum as well, says ABI.
Consequently, the market for overall mobile apps is projected to soar in next few years. The market research firm predicts that the total mobile app revenues from pay-per-download, in-app purchase, subscriptions, and in-app advertising will skyrocket from just $8.5 billion in 2011 to $46 billion in 2016.
Concurrently, ABI’s report shows that the in-app purchases are also on the rise. Consequently, in 2012, mobile application revenues from in-app purchases will pass pay-per-download revenues. However, the report cautions the app developers, saying that unless they are creative and Google (News 
- Alert) gets in gear, the in-app purchase party could be short-lived.
In a statement, Mark Beccue, senior analyst, mobile services, commented, “As a revenue model, in-app purchase is very limited today.” He added, “The vast majority of current in-app revenue is being generated by a tiny percentage of people who are highly-committed mobile game players. We don’t believe the percentage of mobile game players making in-app purchases will grow significantly, so for in-app purchase revenues to grow, mobile developers other than game developers must adopt it.”
ABI’s study suggests that in-app purchase revenue growth has been hampered by Google. The company did not introduce in-app purchase to Android (News - Alert) market until July 2011 and only recently added 17 mostly-European countries in December 2011, according to ABI’s report Mobile Application Business Models. Also, says the report, pay-per-download is not an option in all markets for Android and subscription billing is not offered at all.
“Google is literally holding back the growth of mobile application monetization,” stated Beccue. “We are keying many of our mobile app revenue forecasts around our guess of Google’s plans,” said senior analyst Beccue.
Ashok Bindra is a veteran writer and editor with more than 25 years of editorial experience covering RF/wireless technologies, semiconductors and power electronics. To read more of his articles, please visit his columnist page.Edited by
Rich Steeves
