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

Prateek Saxena
By Prateek Saxena| Friday, September 14, 2018 08:22 AM |5 min read
How Much Money Can You Earn Through an App Read Here

Originally published April 10th, 2018, updated August 13th, 2019.

Mobile App Development Industry comes along with a huge potential to earn millions of dollars. However, not every app earns equal share of Android and iOS market revenue.

In spite of following the same mobile application development process to make money with an app, not every developer is enjoying the fortune of getting billions of dollars being transferred to their accounts. This is making startups and developers who are yet to enter the mobile industry encounter with questions like, “ Do apps make money?”, “How to make money from mobile apps successfully?” – questions we will tackle in this article.

But before we dig out answers to these questions, let me share one thing – There are over 3 million apps on both Apple App Store and Google Play Store, and many more are expected to enter the domain. Meaning, there’s a tough competition in the marketplace for making money with apps development.

In such a scenario, one thing that can prevent your app idea sink like Titanic is focusing on the right considerations before building an application.

So, let’s uncover what things you must consider before making any effort into money creating apps development.

Things to know before going for app development

Often, businesses think about how to make money from an app idea without giving much heed to what’s the secret behind apps that go viral and how to earn the same amount of fame and profits. An outcome of which is that they fail to achieve their goal.

So, the first thing you need to consider while determining how to make money by developing apps is to focus upon what features are making an app popular in the market. A look into this will not just increase the chances of earning potential profits, but will also help to lower down the cost of developing and maintaining an app.

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.

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Payment is another big factor for users. Most users are skeptical about the security of an app which prevents them from buying your products. Considering payment gateway integration will make things better. You can also attach most used mobile payment apps such as Google Pay, Apple Pay, PayPal, etc. in your app to increase your Android/iOS app revenue.

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, especially when creating apps for money.

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 second quarter of 2018, the number of Android powered smartphones sold was 329.5M when compared to 44.72 of that running on iOS. This clearly shows that Android users are in majority and thus, Android can be the right platform to make money with an app – provided the right strategy has been used.

But prior to digging deeper into the details of how much value you should put on your expectations in terms of making money with apps development, 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  decided iOS app revenue amount is earned.

How are Payments Made in Play Store?

When talking about how much an Android app earn, the amount that your paid app receives 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 platforms – iOS and Android, standing at in terms of revenue, here is the answer.

The global Android and iOS app revenue grew by over 23 per cent in the year 2018 to arrive at around $71.3B, 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.

Global App Revenue for Apple and Google Play Store

However, the report found that Apple is the platform providing a better answer to how to make money from mobile apps – a value that is twice as much as what Google Play Store is making. Between 2017 and 2018, the Play Store and App Store saw revenue growth of 27.3% and 20.4%, respectively. However, the percentage rise in app downloads was 13% in the Play Store and only 6.6% in App Store.

How much money do Apps make?

Now that we know what are the things to consider while mobile application development 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 you make from an app?

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.
  • Which 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 answering how to make money by making apps, 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 the best method to make money with an app 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 making money with apps development.
    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.

[As we are talking about hooking a mobile app, learn about the science behind making your app addictive here:- What Wikipedia Can’t Tell You about Making Viral and Addictive 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.

Which Mobile App Category Makes the Most Money?

The category your mobile app belongs to tend to have a huge impact on the amount you earn from your app.

There are some applications like ride-sharing apps which although hold the capability to earn high revenue for your business but doesn’t because of high competition. But, there are some that keeps you focused upon the amount you can earn from your app.

Here are those categories that you should look at to earn high revenue for your business.

  • Music App
  • Social Media App
  • Entertainment Apps
  • Gaming Apps
  • Business Apps
  • Finance Apps

Can you make money from apps irrespective of the store?

Yes, you can. There are various ways of making money with apps development, 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 for 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 models in the process of making money creating apps 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.

Do You Earn Equally Irrespective of the Device Type?

Well the answer that holds true today is no. You don’t. 

But soon, with more and more device types entering the app showcasing market – Home assistant devices, TV, wearables, etc., the earning number might come on a similar tangent. 

Speaking strictly of today, next to mobile apps, apps made for gaming consoles, home assistant devices, and wearables tend to make the most money. So if your app belongs either of these categories, you are in luck. 

What is next in the mobile app development world?

Now that you know 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 technology trends for 2020 that are set to enter the mobile app development industry and 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

Frequently Asked Questions:-

*Do free apps make money?

Yes. There are multiple ways through which applications which don’t charge money from users make money. 

Ways like in-app advertisements, sponsorship, and referral marketing through which these apps make money to grow their business. 

*What are the most profitable apps?

If we had to list down three app categories that tend to make the most money for their parent business, it would be – Music app, Gaming app, and Video streaming app. All three of these app categories are such that the engagement level is very high. 

*How much does the app store pay per download?

Apple takes 30% of the revenue made on the Apple app store and give the rest – 70% to the developers. 

*How much does Google pay per download of an Android app?

Google takes 30% of the revenue made on the Android app and give the rest – 70% to the developers. 

*Do apps make a lot of money?

It depends. But on a very generic note, until you have an established brand name supporting you or you have a strong community of influencers backing you, you will have to wait for some time before the breakeven would end. 

The other thing that you can do is make multiple apps and publish them on stores to expand your earning ability.

*How much revenue an app can generate?

The value depends entirely on the core functionality of your app, the platform considered, the expectations of targeted audience, the monetization model chosen, and more.

*Can you make money from an app?

Yes, anyone can make money from an app.

*How much do mobile app developers make?
The value completely depends on factors such as platform, features, user expectations, monetization model, and more.

*Which Platforms Make the Most Money For App Developers?

While the value varies, it has been found that over 25% of iOS mobile app developers earn over $5,000 for their apps when compared to 16% of Android mobility experts. So, iOS is the platform that often makes more money.

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Prateek Saxena
About The Author

Prateek Saxena is the Co-founder of AppInventiv, one of the fastest-growing mobile application development companies, based in Noida, India. With an extensive experience in Sales, he has established himself as a highly-focused user experience expert and product strategist, and as one who is always ready to take the new challenge to drive value to the company.He’s an energetic leader, effective communicator and a strong motivator, with a commitment to relentless improvement and innovation. He has, so far, mentored more than 100 startups and entrepreneurs worldwide, and is eager to help many others in planning their mobility roadmap.

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