Study shows 90% of all app downloads are free while in-app purchases soar to new heights [iOS, Android, Windows Phone]

I play Facebook games. I also play games on my phone. In both cases, most of the time the games are free to download. In that vein, I’m right in line with 90% of all app downloaders, a new Gartner study says. Gartner reports that free apps will represent 89% of global app downloads in 2012 by the time the dust settles, and by 2016 – just four more years – that percentage will grow to around 93.

It is important to note Gartner’s numbers aren’t specific to one platform; the numbers are an aggregate for all mobile platforms Gartner looked at, including the three big ones iOS, Android, and Windows Phone.

Downloads are increasing steadily, and this is great news for developers. However the other side of the coin is more sobering – while the number of downloads are increasing (45.6 billion expected this year, up to 309.6 billion by 2016), people are actually buying fewer and fewer apps. The Gartner study found that paid apps priced at $2.99 or less make up about 87.9% of all paid downloads this year and go up to 96% by 2016; this means of the apps that are purchased, Gartner expects people to buy less expensive ones at time goes on.

What does this mean for developers? Why aren’t we hearing app developers moaning, wailing, and gnashing their teeth in the streets every time we go out? Well, that’s because they’ve gotten a little smarter, and are evolving with the market. While the outright purchase of apps has gone down and is decreasing, the purchase of in-app content has gone way up.

I’ll be honest – I’ve bought currency in Facebook and mobile games. I’ve spent real money on fake items, and I do it regularly! Once again, I’m in the crowd of people Gartner studied and, because of people like us, in-app purchasing is now a key tool for monetizing applications. None of in-app content is necessary for the base app – all these games and applications can be played and used without the extra content (albeit you often need a lot of patience). However I still pay for it, as do many others. Why? Well, while we may be past what was termed the “microwave generation,” we all still want things fast, faster, fastest. And a lot of times it’s these paid-for items that will make things faster – even if only by a few seconds. Remove the ads in my Words With Friends game so I can go straight from one person’s board to another without having to wait for the “return to game” button to load? Sure! I’ll buy that. Put out five bucks so my crops in FarmVille mature instantly and I don’t have to wait 12 hours to complete this quest? Of course I’ll buy that!

This trend has brought with it the Gartner prediction that the download of apps that use in-app purchasing is going to soar in the coming years — starting at a meager 5% of all apps in 2011 to upwards of 30% by 2016. Instead of getting their main revenue from the initial purchase of a download, app developers will be gaining up to 40% of their revenue through in-app purchases. It’s all about following the trends and evolving with them, and the apps market is already full of developers who are reading the Gartner report, among others, and deciding how best to move forward with their development.

Is there an app I can buy to accelerate time and see what happens by 2016? I’d buy that.

[via Gigaom, Gartner]

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4 comments

  1. fermier

    Certainly, check out http://roperweb.ropercenter.uconn.edu/cgi-bin/hsrun.exe/Roperweb/PP_Index/PP_Index.htx;start=HS

    Further to above, I believe it’s perfectly fine for developer to advertise free and then have IAPS. But, to advertise “Regularly $X, but free for limited time” and then have IAPS, is not fine. Developer realizes parents likely will pay up anyhow, to avoid a tantrum of, if the child is old enough to procure weapons, worse. No it’s not crazy, it’s the times that are crazy. The pendulum has swung from one extreme (era of Chas. Dickens and “Bleak House” “Oliver Twist” etc.) to the other.

  2. fermier

    .Roper found that fewer than one in five (18 percent) Apple store apps is for grownups, and with more than half of the remaining being for very young including toddlers. Would consider that remarkable as well