App Business Model

Taken from Vision Mobile brochure of report
App Profits and Costs : The ingredients of a successful app business and how to replicate them

Insight

• 63% of app developers and companies that care about revenues are below the profit line. 24% of developers make a definite loss and another 39% struggle around breaking even or slightly above that.
• South Asia stands out as the region with the highest share (37%) of profitable app businesses. West Europe has the highest share of loss-making app businesses, while South America has the largest occurrence of struggling developers (48%). As contract work is gaining ground in South America, the prospects for healthy profits in the region are improving.
• iOS has the largest share of profitable developers (41%) across all platforms. Surprisingly, iOS also has the most developers (19%) whose losses are in the ‘deep red’, i.e. below the $2,000 per app/month mark.
• There is a chasm between the revenue models of the old, such as pay-per-download and in-app advertising, and of the new, such as e-commerce and affiliate programs. E-commerce is the most lucrative revenue model at $2,750 in revenues on average per app / month, and also the most profitable; 52% of developers using e-Commerce revenue models report comfortable profits.
• Guns For Hire (developing apps on commission) are the most profitable developer segment, as 54% of Guns For Hire make more than $2,000 per app per month. Product Extenders (non-mobile business extending to apps) are the biggest spenders, their median expenditures reaching $2,400 per app per month.

There is a chasm between the revenue models of the old, such as pay-per-download and in-app advertising, and of the new, such as e-commerce and affiliate programs. E-commerce is the most lucrative revenue model at $2,750 in revenues on average per app / month, and also the most profitable; 52% of developers using e-Commerce revenue models report comfortable profits