Free or paid apps?

Many studies on consumption point to an obvious conclusion: most people hate to see ads while browsing the apps of their smartphones and tablets. But, in fact, when faced with the option of choosing between free apps with ads, or paying only $0.99 for ad-free apps, consumers actually prefer free apps.

The graph below shows the variation of free versus paid apps from the App store, over the past few years. It's noticeable that, recently, users have been opting more for free apps.

On the other hand, conventional wisdom (supported by a series of surveys) states that Android users tend to have a lower willingness to pay for apps than iOS users.

In April 2013, the average price paid for Android apps was significantly lower than for iPhone and iPad apps, as shown below.

These results also show that iPad users are willing to pay more than other devices' users, including users of iPhone. On average, iPad users paid 8 times more for apps than Android users.

Although Google Play has 25% more downloads than the App Store, in terms of revenue, the App Store wins over Google Play. In monetary terms, according to Distimo, Google made about $12 million a day from its Play Store, while Apple grossed about $18 million a day in 2013.

Which platforms generate the most revenue by country?

At the distribution level of the iOS platform (iPhone and iPad), the largest revenue from paid apps, between January and November 2013, derived from the United States, followed by Japan and the United Kingdom. On the other hand, Google Play has shown greater dominance in South Korea, Japan, the United States and Germany, in this order.

The figure below presents a top 10 of the distribution of iOS and Android platforms, from the countries with the largest market, based on data between January and November 2013, made available by the Distimo statistics company. It should be noted that the percentage of apps paid in China on Google Play is insignificant, so the revenue from China derived almost exclusively from the iOS platform (for iPhone and iPad).

In the top 10 countries in terms of revenues from mobile applications from Apple's App Store and Google Play, between January and November 2013 are: the United States, Japan, South Korea, the United Kingdom, China, Australia, Germany, Canada, France and Russia; having South Korea, Japan and China shown the highest market growth in 2013, compared with 2012.

When you need to decide the business model for the app you have developed you should take these factors into account.