Mobile app development involves expenses. You have to pay your developers if you’re working with full-stack freelancers or you have to pay the mobile app development company you are collaborating with. There are marketing and promotional expenses that you need to take care of and then there are expenses involved in lead acquisitions as well. Obviously, there are tons of hidden costs such as operating expenses, overhead costs and more.

At the end of the day, you want your mobile app to generate revenue and fetch you profits. Well, that is the very basis of your app’s existence and why you decided to work on an ambitious project in the first place.

However, generating revenue from mobile app development is not simple anymore. With Apple App Store and Google Play Store housing 4.4mn and 2.9mn apps respectively, there are obviously a massive amount of market players eyeing on your customer’s revenue at the same time as you are.

So, how do you get your customers to spend not just time on your app but money as well? How do you turn your mobile app into a revenue-generating medium that operates on autopilot?

Well, this is what we will explore in this extensive article on the different types of business models you can implement for your mobile application development project.

Let’s get started.

Key Mobile App Revenue Statistics

• The mobile app revenue market reached a value of $111bn in the year 2020.
• The iOS app market has been solely responsible for close to 65% of the total app revenue.
• The gaming sector had the largest market share (71%) with respect to app revenue generation in 2020.
• Revenue from subscription-based services also increased to $13bn in 2020.
• Users spend an average of $380bn just on in-app purchases globally.

Top Business Models For Mobile App Development

Freemiums

Sounds ironic, right? How could something that is free help you generate revenue? Well, that’s what freemiums are all about. A blend of two words - free and premium - freemiums, are apps that are available to users for free. However, they come with tons of options and features that could be availed by users for enhanced user experience by paying a small fee or price.

To throw in some surprise, 98% of all the revenue of Google Play comes from free apps.

Freemiums are ideal to get the word out for your app, get more users and retain them. You could cover your mobile apps development services expenses by limiting some premium options and features to paid users. When your app is too compelling, your users wouldn’t mind paying to get the complete experience your app offers.

For instance, if you’ve developed a diet and nutrition app, your paid features could be a consultation with a nutritionist or the preparation of a personalized diet chart. These micro modules are less expensive from a customer perspective and would ensure cash keeps flowing into your business.

Subscription Model

Evolving from the good old days, where you would pay an annual or a quarterly fee to get your favorite magazines and newspapers delivered to your home, subscription models are a current rage in the app market.

This model became more prominent after video and audio streaming platforms like Netflix and Spotify deployed it to generate revenue. For the uninitiated, a subscription-based model lets your users pay a monthly, quarterly or a yearly subscription to avail all the services your app has to offer. When the subscription gets over, the app’s features and experiences get automatically disabled.

This is ideal for those who wish to block ads and experience uninterrupted app sessions. One of the advantages is that this model need not be your only business model for your mobile app development solutions project. This could be an addition to another business model.

For instance, you could have an on-demand app and still have subscription-based services to fast track deliveries and prioritize shipments like home Prime membership works.

Advertisements

Advertisements are one of the major sources of revenue for app developers. In this model, developers offer real estate for brands and businesses to showcase their products or services, deals and discounts or more in their app to capture eyeballs and possibly redirect traffic.

By displaying advertisements, developers can stay away from asking money from their users and keep their apps free. Their mobile app development expenses could be compensated through brand collaborations. Ideally, small businesses have to show some initial traction to be eligible to display advertisements by having a minimum amount of regular app usage and retention numbers.

Once the threshold is reached, brand collaborations happen on auto-pilot. Once ads keep coming in, developers can roll out ad-free experiences at a cost as well.

Sponsored Campaigns Or Posts

If you have a market aggregator service or an app, you could generate revenue by offering premium spots on search results to your customers. As an online marketplace, your customers are going to search for products and services and click on the first few links that are displayed.

You could let your brands and businesses pay for the top spot and appear as premium sponsors to get the immediate attention of your customers. This helps the brands get traffic and ultimately sales and you get revenue in return. On-demand healthcare apps have featured doctors, matrimony websites have featured profiles, restaurants have top restaurants and more.

Affiliate Marketing

One of the other interesting ways to generate revenue for your mobile application development project is through affiliate marketing. If you didn’t know, close to 15% of all the revenue of digital advertising revenue comes from affiliate sources.

Affiliate marketing involves letting interested people become official members of your app and promote it to their followers and users. To do this, they get a percentage or cut from the sale that happens through their affiliate link.

This is an interesting concept that can help your app reach more users and generate more revenue ultimately. A lot of YouTubers, Instagram influencers and bloggers promote affiliate links that are relevant and contextual to their domain and audience preferences. This way, you ensure conversions happen for sure as well.

Paid Apps

Paid apps are straightforward. There are no hidden terms and conditions or catches. Your users pay to download and install your app. As simple as that.

The features of a paid app are all available to customers as they pay in advance to avail the entire app experience to themselves. This is highly beneficial for super-niche apps and services, where your app stands as a unique offering in the market. What your customers pay should be worth what they get for in return.

Extensive research and analysis should go into this before applying paid strategies for your mobile app development project. Also, you should remember that you don’t get the full amount your customers pay online. App stores take a small cut for all the sales that happen on the platform with some conditions on caps and mobile app downloads.

Apps like Geoshred are iOS exclusive designed for musicians. They have a super-niche customer base who wouldn’t mind paying an amount to experience the app.

App Commissioning

This is one of other interesting business models for mobile app development, where you bridge the gap between the problems of a specific audience and their solutions through a mobile app development services company

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You are the idea that connects skills and solutions. You commission an app and sell in the market and generate revenue in return. Close to 26% of the developers out there develop apps on a commissioned-basis and make profits.

Wrapping Up

So, these were the top business models for mobile app development. There are more creative ways to generate revenue for your mobile app. However, how much revenue can be sustained in the longer run depends on how stable and impeccable your app is.

It’s not enough to have a great idea. It should reflect on the app’s quality and serve its intended purpose. That’s where the resources and skill sets of a solid mobile app development company like ours comes into the picture.

We are pioneers in the mobile app development industry having decades of experience in app development. We know what works in the market and what doesn’t. We also offer insights on the best business models for your mobile app and ensure you reap profits quickly.

Get in touch with us to discuss your ideas and turn them into a reality.