How Much Do Apps Make?

Home / Marketing / How Much Do Apps Make?

Apps are a big business with huge moneymaking potential. There are some types of apps which have made billions of dollars while other types of apps make zero dollars. The apps which gross the most revenue are ones that you probably would never guess. If you were to ask an app development company about how to make the most money possible from an app, they will give you a list of the do’s and don’ts. In this article, you will learn all the secrets of how apps generate revenue and how much do apps make. Hopefully, you can use this knowledge to enhance your own app so that it will earn more money for you too.

Mobile App Potential

In the last 10 years, there has been a significant growth in the mobile app market. Critics believe this growth will continue strong. Last year, out of all the American-based traffic that visited websites, 63% of it were mobile users. Studies show that adults spend roughly 3.3 hours per day using their smartphones and looking at digital media. All other connected devices, such as desktops and laptops, lagged behind. Since mobile devices have such high usage numbers, entrepreneurs and major corporations want in on the action because they see the moneymaking potential here.

If you have a desire to enter this market for the first time and you have an app idea in mind, then you might be thinking about how to make money from an app. What you should really focus on first is developing a high-quality app because that will be a hard enough task. Of course, you will want to seek the rewards of taking the time and effort developing an app like that. To help you realize how much you can you make from an app, here is an overview of what you can expect.

Moneymaking App Platforms

The mobile app platform that you build your app for will determine its earning potential. There are certain market factors which cause this to happen, such as the popularity of the platform and market penetration.

So, depending on the app platform, how much do apps make? Startup entrepreneurs that have an Android app earn about $97,600 per year on average. Android is a widely used platform which has growing market penetration. As for average ios app revenue, startup entrepreneurs here will earn roughly $96,600 per year on average. However, only top developers earn most of the app revenue generated from these two platforms. In order for new app developers to compete, they hire marketing specialists to assist in narrowing this gap.

 

Recommended Reading: “iOS or Android: which app should you build?”

 

Individuals and businesses looking to build successful apps are not interested in certain mobile platforms like Windows Mobile or BlackBerry OS. According to Gartner Inc., the market share of the latter decreased to 0.04% two years ago. It has become a virtually obsolete platform that few consumers use. Windows Mobile was another failure too, so it was canceled in fall of last year. There are plenty of niche platforms which can earn you great profits. However, you shouldn’t even bother with them until you’ve made money from the major platforms like iOS and Android. If your app has proven to be profitable on these, then you can afford the risk of porting the apps to new platforms.

How much do apps make?

There is a lot of money in the app business. By 2020, the amount of worldwide app revenue is expected to be up to $188.9 billion. This is an over 200% increase from the same projected amount from the year 2016. The highest grossing apps appear to be gaming apps. Epic Games is a company which created the “Fortnite” app. According to a report from April of 2018, this app generates roughly $1.9 million per day for the company. This is the highest grossing gaming app of them all. This was a little less than the $930 million it grossed in 2016 when it was released. But even if you don’t want to get involved with designing games, there are certainly examples of other companies, like Netflix, Tinder, Airbnb, Uber, Snapchat, Evernote and many others, that are super successful in other mobile app niches. There is definitely a niche for your app idea to conquer the app market.

When you find apps in the mobile store, most of them can be downloaded for free. This is how they get people emotionally connected with an app. Then, depending on app monetization model, as you want to continue to use an app or get more features you have to make in-app purchases or pay for a subscription. In 2016, there was a prediction that in-app purchases would generate roughly $37 billion in global revenue. This was more than the $29 billion that was predicted to be generated from paid app downloads. 

How much money do apps make with subscription monetization model?

Match Group is a company that created the highly profitable “Tinder” app, which grew to have more than 46 million users registered on it. Most of its revenue comes from in-app purchases. Tinder is a dating app which can be downloaded for free. However, it offers bonus features to its users which cost money. For instance, you can pay extra to have unlimited swipes to have unlimited matching opportunities. You can also purchase an add-on called “Passport” which lets you find users outside of your own location. If you want to increase the ranking of your profile for your location, you can purchase the “Boost” feature too.

According to Match Group, in the first quarter of 2018, their app revenue earnings amounted to more than $407 million. If you want a subscription to Tinder Plus, you need to pay $9.99 per month. If you are 28 years of age or older, then you pay $19.99 per month. There is also an upgrade to Tinder Golf which charges $4.99. Because of these extra purchases, Tinder has been able to generate more revenue than virtually any other app in the world.

 

Recommended Reading: 8 App Monetization Models For Your Mobile Application

 

Bumble follows Tinder’s lead by having 22 million users. On the other hand, their yearly growth rate is exceeding Tinder by about 60%. Bumble is a dating app too, but they are different because they only let women start a discussion using the app. The app has quickly spawned other similar apps related to searching for friends and networking. The Bumble app is estimated to make about $172 in revenue every 60 seconds. Most of this comes from the $9.99 per month that it charges users for the subscription option. There are also extra features they can purchase like SuperSwipe and Bumble Boost.

Other high-grossing mobile apps include Tidal, Pandora, and Spotify. Most of their revenue comes from user subscriptions. This is a popular way for apps to make money. We see this method being used by Netflix and Hulu as well.

The mobile app “Hotspot Shield” from AnchorFree is useful for many different things around the world. It lets global users connect to a VPN or virtual private network. During the Arab Spring, this was an important piece of technology because it let people work their way around government censorship. Users can purchase a one-year subscription to this service for the equivalent of $5.99 per month. If they want to pay on a monthly basis only, it is $12.99 per month. On January 2017, the Hotspot Shield app reportedly had 5 million people download and install it. Out of all the apps that are found in the iTunes App Store, this is one of the biggest earning apps that it has.

Smaller apps are also seeing big revenue increases too. Hooked is a simple app from The Telepathic, Inc. which is one of the biggest grossing apps in the books category on the App Store. When users access this app, they will be treated to thrilling stories which are written like conversations through text messages. You can purchase a yearly, monthly, or weekly subscription to the app. Users who read a portion of these stories will likely be so interested to find out what happens next, that they will subscribe to see the ending.

A personal trainer by the name of Kayla Itsines released her app called “Sweat” which has grossed a lot of revenue. This proves that even newcomers to the app development world can strike it big. Revenue is generated from users who subscribe to her diet plans, yoga videos, and 28-minute workout routines. After the app came out in mid-2015, it gained popularity quickly. As of now, it makes more than $100 million annually in revenue. Itsines, along with her spouse, have a combined total net worth of $46 million.

Apps Are Not All for Mobile Devices

Apps are no longer for cellular platforms only. With the increase of produced smart devices, there are apps for virtually everything that has smart technology in them. Smart TVs, for example, are increasingly popular right now. There are over 70 million Smart TVs in American homes. Popular apps for this technology include ones like Hulu and Netflix, which let you watch streaming video. So, when you are thinking about your app’s design, consider Smart televisions and how it will look on that platform. You’ll want to expand your app to as many mobile platforms as possible because it will allow you to reach more people and maximize your app’s revenue potential.

 

Recommended Reading: “Building an app that makes money”

 

Choosing the best platform to host your app is very important. If you look at video game consoles like Wii U and PlayStation 4, they have personalized app stores of their own. But there are still common apps on these platforms like Amazon, YouTube, Netflix, and Hulu. Then you might find apps which are only found on these platforms, such as PlayStation 4’s BBC and Spotify. This makes it very convenient for people who regularly use these platforms and are interested in those services. Of course, it won’t make everybody happy, though.

Smartwatches have their own platform, so you should pay attention to it. More people are using wearable technology, which is why smartwatches are expected to become 51% of the total market share of wearable devices over the next 4 years. This is a big increase from the 21% share that was predicted in 2016. If you can design your app so that it is compatible with smartwatches, then you will beat most of your competition.

The Future of App Development

The app marketplace can be a great way to make money if you know what you’re doing. It is a market that has continued to grow since it first began, and it is not going to stop anytime soon. Even though there is an abundance of apps in the market, the global revenue of app stores is expected to get up to $110 billion annually. Now we are seeing countries like India, China, and Brazil entering this marketplace too. Bigtime app earners right now are video game apps; however, you can also make money with simpler productivity apps or novelty apps. And since smartwatches and smart televisions are expanding the app market, this creates more revenue-generating potential too.

Ready to create a high-quality app? Contact us for Free 60 minute Skype consultation!

App development services we are ready to provide you.