In-App Purchases are Becoming a Dominant Mobile App Revenue Model

Once upon a time, some observers gushed about the revenue opportunities mobile apps represented for developers, though it always has been clear how important mobile apps were for the device and mobile operating system suppliers.

It is starting to look as though the direct app purchase opportunity is more limited than expected, while in-application purchases (mobile commerce) are emerging as the key revenue model for developers, at least in Asian markets.

In other words, the freemium model has gotten traction, where developers give away free access to an app, and then features and add-ons for those apps.

In-app purchases generated 76 percent of all revenue in the Apple App Store for iPhone in the United States in February 2013, for example.

At least 90 percent of all such revenue was generated by in-app purchases in the Asian markets, which include Hong Kong, Japan, China and South Korea, Distimo data suggests.

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