How Much Money Can You Earn Through an App? Read Here

By Prateek Saxena| Friday, September 14, 2018 08:22 AM |5 min read

Originally published April 10, 2018, updated 14 September, 2018

Mobile App Development Industry comes along with a huge potential to earn millions of dollars. However, how to make an app and how much money you can make from an app depends on a number of factors which we will discuss later in this blog.

It takes a certain kind of application that promises to become a million dollar story from the very day of its inception.

But, now that you have spent a fortune into bringing the idea of your mobile app into reality, it’s no time to think if your app is of that certain kind but the time for your app to bring you some return on your investment.

When you decide to build an app, right from the day you materially start planning, there are a number of things with which you should start the forethought. With over 3 million apps on both Google Play store and Apple App store, it would take careful consideration and groundwork on how to make an app and earn money from an app.

It takes a lot more than just an idea and a development team to make an app successful. There are certain things you must consider before thinking of making money with an app.

Things to know before going for app development

Often, businesses think about how to make an app and then they decide to go for app development with the aim of making money without giving much heed to how to make it work.

The thing is, apps need to be built in a way that they are capable of earning money. The cost of developing and maintaining an app also depends on the type of app being developed. An app will be useless if it does not have the potential to earn profits.

In a survey, it was seen that 63% of users prefer mobile apps for the sole reason of convenience. Other responses that were recorded in the same survey suggested something similar to convenience as well. All this concluded to the fact that customers want an app that is fast, efficient and visually appealing.

Payment is another big factor for users. Most users are skeptical about the security of an app which prevents them from buying your products. Having a secure payment gateway in your app will make things better. You can also attach already trusted payment gateways in your app such as Google Pay, Apple pay, PayPal, etc.

Even after doing so much, some customers may find the process of payment a bit tiring. For that apps can have the feature of saving credit or debit cards.

Choosing the right platform is yet another factor responsible. Android vs iOS is a very debatable topic and probably has no end to it. However, choosing one between the two requires some serious statistical support.

The average in-app purchase per user is 2X higher for iOS than it is for Android. But this doesn’t mean choosing iOS is the best option. Even though iOS has higher in-app purchases, the number of Android users surpass iOS users easily.

In the year 2016, the sale of smartphones consisted of 81.6% Android and the rest of iOS. This clearly shows that Android users are in majority and you can make money from Android app if the right strategy is used.

But prior to digging deeper into the details of how much value you should put on your expectations in terms of how to make money from apps, let us first look into how does the payment cycle work in Play Store and Apple Store.

How are Payments Made in Apple Store?

iOS App Payments are usually made in under 45 days of the last working day of a month when the app purchases were made. To receive the payments, you must provide all the necessary bank and tax details and documents, and you should maintain the minimum payment level. Also, there should be a minimum threshold amount you should have earned before getting the amount credited in your account otherwise it carries forward to the next payment date, till the minimum amount required is earned.

How are Payments Made in Play Store?

The amount that your paid Android app earns, gets credited to your account within the cycle of 30 days. There is no minimum threshold when it comes to the amount you earn with apps in the Play Store. If your Android app make money above $1, it gets credited to your account. However, Play Store works on a 70:30 payment distribution ratio. On the amount of money that you earn with apps, Play Store keeps 30% and credits the other 70% in your account.

Revenue Growth For Android and iOS

If you are wondering that with payment models such as those stated above, where are both the platforms – iOS and Android, standing at in terms of revenue, here is the answer.

The global app revenue grew by over 35 per cent in the year 2017 to arrive at around $60 billion, as cited by a new report released by Sensor. Sensor is the app intelligence firm which measures subscriptions, paid apps, and the in-app purchases that have happened in both Google Play and Apple’s App Store.

However, the report found that Apple is the platform that is seeing maximum revenue growth – a value that is twice as much as what Google Play Store is making. Between 2016 and 2017, the Play Store and App Store saw revenue growth of 34.2% and 34.7%, respectively. However, the percentage rise in app downloads was 16.7% in the Play Store and only 6.7% in App Store.

How much money do Apps make?

Now that we know how to make an app and how the payment system works in Play Store and App Store and the scope of generating revenue that both the platforms have to offer, let us now understand the answer to the real question– How Much Money Can Your App Make for you?

Following are some questions that can help us in an objective interpretation–

• What Platform Is Your App Based On?
  The platform you develop your app for can have a major impact on the money earning capability of your app.
  When it comes to how much money do apps make, Apple wins the race. Over 25% of the iOS App Developers earn over $5,000 from their app while only 16% of the Android App Developers are able to make anywhere around $5,000 from their Play Store Applications.

• Does Your App Have an In-App Purchase Option?
  Powering the Apps with in-app purchase options is a strategy mostly applied by gaming apps. The strategy has proved to be a money mine for a number of app developers.
• App Stats
  Candy Crush makes over $800,000 every day through in-app purchases. Supercell, the creators of Clash of Clan game generated over 848 Million Euros all with the help of in-app purchases.

• Have You Tied up With Any Company to Display Their Ads in Your App?
  In-App Advertising is another sure shot way to earn money with your app.
  For instance, you have tied up with a company on Click Per View Agreement. For every advertisement, you charge $0.01 from your partnered company. Now, even if you get 10,000 daily users on your app and they see your advertisement to move on to the next level, you will earn 100$ every day, on the maximum level.An app developer, Akshay Laghate shared his money earned through app data on Quora. This is what he had to say – “I had 8 apps on Play Store. All were free apps with ads and have approximately 100,000 daily active users in total. I used both banner and interstitial ads in my apps. My daily revenue is in the range of $140-$180.”

• Does Your App Follow a Subscription Model?
  Tinder has a $9.99 monthly plan for the Tinder Plus subscription and a $14.99 model for the Tinder Gold subscription. This approach has helped generate over $285.3 million for Match, Tinder’s parent company. Tinder is not the only brand enjoying the perks of a subscription model. It is at the back of its subscription model that Netflix app has been able to generate over $11B in revenue.
  
  When your app offers something of real value to your customers, something that would keep them hooked to your app, they prefer spending money month on month or on a yearly basis as seen in Amazon Prime. By hooking your customers to apps is how to make money off apps.

• Is Your App Fixated on Mobile?
  If out of the two options – native vs hybrid app you chose hybrid, your app works between multiple devices seamlessly and chances are that you will be earning more money with them as compared to when you restrict yourself to mobile. With Smart TVs finding a place in the homes of over 34% of global Play Store and App Store users, the amount of visibility and the chances of people paying to install your app, has grown manifold. So now that you know the category of apps, which generate maximum revenue in Apple and Play Store, look where your app stands in the categories list.
  
  An important thing to note here is that you should be in sync with your app development company from the moment you get the idea of developing an application, in terms of your app monetization model.

  Can you make Money from Apps irrespective of the store?

It is often asked ‘Can you make money with apps in other ways?’ and the answer is yes. The ways of making money in apps that were stated above are all dependent on the app stores and the technicalities of the app. However, there are others ways to make money from an app and these are all in control of the app developer. Basically, there are four ways to make money from an app, irrespective of the store.

Let us skim through them –

• In-App Purchase
  Mostly seen in case of Gaming apps, in-app purchase model is the one where you attach money to an item that your user would need in order to move on the next level or for getting special powers. Game developers have been making money on mobile apps by offering special features and add-ons to the users.

• In-App Advertising
  When you allow another app brand to show their advertisement in your application, you charge them on the basis of Click Per Impression (CPI) or Cost Per Click (CPC). You can make the most of the strategy by making it mandatory for the users to view an ad.

• Freemium
  Freemium mode of Monetization is when you offer an advanced version of your application to the users in return of a sum of money. This way of making money with an app is successful most of the time. The idea is to keep the best features in the locked version to let the users pay to take advantage of them.

• Sponsorship
  One of the least seen monetization models is that of sponsorship. This is how it works – you first have to find a brand that is offering an app similar to yours to a similar set of audience and then you approach them with the proposal of redesigning your app according to their app style, so that both your and their customer base increases.

  What is next in the Mobile App Development world?

Now that you know how to make an app and how to make money from mobile apps, you should get the benefit of knowing how the future for mobile app development looks like. Over the years mobile apps have seen good money and this will for sure continue in the coming years as well. The gaming apps are making millions every year but the simple apps are still on their way to earning millions. Augmented Reality, Artificial Intelligence, and Virtual Reality are the latest technology set to enter the mobile app development industry and this will change the whole market.

In conclusion, there are endless possibilities for earning big bucks attached to the applications you submit to stores. You only have to rummage through your options and make the best out of it. For more information, contact us at Appinventiv.

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