TMCnet Feature

One of the biggest buzzwords of 2011, freemium, has stormed the world and the Internet. Worldwide of the 250 most top-ranked iOS apps across all categories, an average of 88 percent are already free to download and monetized incrementally with advertising and in-app purchases.

As freemium grows in popularity, so will the trend. It’s possible that at this time next year in certain categories all relevant iOS apps will be able to be downloaded by users for no charge. Apple enabled an in-app purchasing for free apps back in October of 2009 and since then developers have ran with the idea. Developers began evolving their business model to work with the system verses against it.

Aapo Markkanen, senior analyst for Consumer Mobility, explains, “What many observers misunderstand about freemium is that it isn’t only about monetizing, but also about marketing. The threshold for consumers to download free apps is really low, so more people end up using and recommending them, which then also gives those apps a bump in distributors’ ranking systems. This means that paid apps fail to draw attention in the first place.”

However, this does not apply to all countries. Research has shown that in Germany, 17 percent of the top iOS apps are still paid, while in India and South Africa their share is already as low as 5 percent. If you compare those statistics with that of the top leading app market, the United States, 10 percent of the top apps are free.

Other factors such as the categories the apps are in do factor into the percentages. Another area to consider is the mobile device you are receiving the application or in-app purchases from.

Dan Shey (News - Alert), practice director of Mobile Services, said Google will need to step up it’s in-app purchases if it wants to take on its rival competitors.

“Apple (News - Alert) has always had an edge against other app platforms in convincing users to pay, and if anything, the shift toward freemium is amplifying the dynamic. In-app purchases are often impulse purchases, so the payment experience has to be very smooth and simple. For Google, finally sorting out Android (News - Alert) Market’s billing process will be one of the key issues of 2012,” said Shey.