Users Bought Over $120 Bn Worth of Apps on iOS in 2015

January 13, 2016 | Raj Srivastav

Yep, you read that title correctly – over 120 Billion dollars in 2015 – just on iOS.

That’s nearly 330 million dollars per day, every day of the last year. More importantly, that number is the total revenue generated; meaning that it’s not an aggregated number from all possible money sources an iOS app represents.

That means $120 billion was generated solely from purchasing apps. This seems to fly into the face of what is held as canon: it is very hard and rarely profitable to charge users for apps. More importantly, does this mean Android is on its way out?

Well, those all sound like excellent questions for a blog. Why don’t we dive a little deeper into each question, and what they tell us about the future of this dynamic industry.

So, Is Charging to Download Profitable?

This is the heart of the issue, so let’s talk about it right off the bat. The simple answer is no. The best way to generate a revenue of an app is still through alternative means, or charging to unlock advanced or additional features.

So what’s going on with Apple? How did they get users to spend so much on iOS apps? The answer is far less simple than one might think.

    • First, Apple has a superb marketing team. They know how to market their services and products. More importantly, they tell developers how to properly market. They know how to make a service or app indispensable (or at least appear so).

    • Second, if you’re going to charge for an app is that it needs to be robust, unique, or invaluable. Obviously, the best is all three. Apple tends to have more such apps (though by no means does iOS have a monopoly). Why do you ask? Fair warning, this is about to get convoluted!

    The biggest reason developers can charge for apps on iOS is that iOS users expect to get charged. Of course, the reason they expect to get charged is that developers for iOS are more likely to charge. You see the chicken-or-egg dilemma we’ve created, no? At the end of the day though, it doesn’t matter. What matters is that the iPhone user is accustomed to paying for downloads. To be clear, this doesn’t mean you can charge for any old app; in fact, it means just the opposite – in general, iOS apps have to be top-notch and extremely high quality.

    A part of the reason that for-pay downloads do better on iOS is due to its market; namely, trendsetters. These are people who always wear the hippest clothes, drink expensive stuff, and always have the coolest new thing. This is a good example of knowing your market

    • As an example of what a robust app is, let’s take a look the industry’s current Navigation app darling, Waze.

    Waze is robust. It has a ridiculous amount of features – everything from finding local gas stations to providing on-road hazard alerts. This is including the standard expected Navigation feature, of course.

    Waze is unique. There are a lot of navigation apps out there with a ton of features, but Waze has features no one else does – plus all the standard features.

    Waze is indispensable. I drive nearly 500 miles a week – Waze keeps me informed of traffic changes, the police (not that I’m speeding…), nearby food sources, gas stations, hotels, and so on.

    importantly, despite all of the above features, Waze is not a pay-to-download app. Think about it – to charge for an app it has to be really something special.

    Our experience has taught us that SaaS apps and programs tend to do the best as a pay-to-downloads.

Is Android on its Out?

No. And just be clear, no. Apple has had a great year; really a series of great years. But they still have half the market share that Android has, and Android is still the preferred OS of the majority smartphone users.

Additionally while iOS is known for its amazing design and fantastic UX, Android is known for pushing the limit. Android and Google push technology beyond what is considered the norm. Android is the OS where innovation flourishes. This will always make it a favorite of techies and nerds. More importantly to entrepreneurs out there, it’s mammoth market makes it a favorite of advertisers! Do you have an an Android app idea? We’d love to hear it, build it and distribute it. Contact us for a free app quote.

About SDI

SDI is a software, app, and website development company. Our development staff of over 200 programmers is based in India, while our management staff is based in the heart of tech world: Silicon Valley.

Our unique business model lets us keep our prices low while circumventing issues with communication and project management that tend to plague outsourced labor. Our project leads will work with you hand in hand and will serve as your liaison with our development team. Got a project you want to get started on now? Give us a call at 408.805.0495 or email to get started right away.

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