"Freemium" Apps Doing Quite Well

Many developers have decided that making their apps available for free is a great way to make lots of money. Just weeks after we highlighted how one developer was pulling in $500,000 a month by making free apps, we’ve got a similar story. Gigaom recently reviewed the top grossing apps in the App Store and acknowledged that nearly one third on the list were free apps. The reason? Developers are increasingly including in-app purchases within their free apps. Apple began allowing in-app purchases last year; since then many of these “freemium” apps have become quite popular with consumers. According to the report:

The numbers behind freemium apps also got a boost from Apple, which changed the way it calculated revenues from freemium apps on Nov. 1, allowing them to be more accurate and consistent, said Bertrand Schmitt, CEO of App Annie. Schmitt said freemium apps began to take off in May and June as more developers began employing in-app purchases and consumers became more aware of it. The model works because it gives people an easy way to try an app and then allows developers to up-sell them on added features or in-game currencies, which help users buy things or move the game along.

I’m one for developers making as much money as possible assuming their apps are good. However, there is a fine line between developers that provide “freemium” apps which provide more of a good thing for some money and those that are only free to suck you in. There is a difference. Luckily, the cream often rises to the top.

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