A recent IHS report shows that global consumer spend on mobile apps is expected to reach £9.7 billion this year. With the market dominated, in most countries, by Apple and Google taking 85% of the share.

Increasingly there is a trend towards free apps to the detriment of ‘paid for’ apps. These free apps include ‘in app purchases’ like exclusive content or new game levels. These ‘freemium’ apps now generate 80% of the app economy revenue.

Recently, Marco Arment, a respected app developer and tech blogger, in this article said “I’m sure of one thing, though: the market for paid-up-front apps appealing to mass consumers is gone.”.  We don’t think it’s as black and white as that and specialist apps will continue to sell well as one off purchases where it makes sense to the consumer or business. 

Consumers will in a lot of cases try a free app (with in app purchases) or look for a “good enough or even “a not very good” free alternative to paid apps in the market place.

With Apple rumoured to be releasing their Garageband music app as a free app with in-app purchases for additional instruments or loops, it seems this trend will only accelerate going forwards. Businesses looking to create revenue from apps need to consider a longer term ‘freemium model’ if they are to succeed.