Report: iPhone Apps See Freemium Rise

GigaOm, Thursday, November 11, 2010 1:52 PM
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Just over one third of the 100 top-grossing iPhone apps are now using a freemium model, GigaOm reports. In other words, the apps are free to download and use, "but make their money through in-app purchases of mostly virtual currencies as well as other premium features." Remco van den Elzen, co-founder of analytics firm Distimo, tells the tech blog that in-app purchases now represent about 30% of all iPhone App Store revenue.

"We're seeing more developers implement more in app-purchases especially with games," he said. "Freemium Apps are also picking up significantly. A lot of developers realize it's a successful model." As GigaOm notes, this market for freemium-based apps materialized a little over a year ago when Apple began allowing free apps to include in-app purchases. At the beginning of the year, there were just two freemium iPhone apps in the App Store among the top 50, according to analytics firm App Annie. By the end of October, however, that number had grown to 10, and now there are about 20 apps among the top 50 grossing apps with in-app purchases.
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