The Future of In-App Purchases - eMarketer
« Return to Mobile Website

Newsletter Sign-Up

Schedule a Demo

Does My Company Subscribe?

The Future of In-App Purchases

Revenues are rising, but app-makers need to expand outreach

February 28, 2012 | Advertising & Marketing | Mobile

Mobile applications worldwide provide several different ways for developers to earn money from consumers as well as advertisers, and revenue from in-app purchases is expected to surpass revenue from pay-per-downloads in 2012.

The “Mobile Application Business Model” study released in February by market intelligence company ABI Research found that overall revenues from mobile applications, including in-app purchases, pay-per-downloads, in-app advertising and subscriptions will reach $46 billion by 2016, more than four times greater than the $8.5 billion earned in 2011.

Mobile App Revenues Worldwide, 2011 & 2016 (billions)

ABI also reported that 2012 will be the year when revenues from in-app purchases will surpass those from pay-per-downloads, as in-app purchases become more widely available in applications other than mobile games.

In January, IHS Screen Digest, a media-focused research and consulting company, released the report “Mobile Media Intelligence Service,” predicting that in-app purchases will eventually bring in the majority of revenue from smartphone apps. IHS Screen Digest reported that in-app purchases worldwide earned $970 million in 2011, or 39% of total smartphone application revenues. This is expected to rise to $5.6 billion, or 64% of smartphone app revenues by 2015.

In-App Purchase Revenues Worldwide, 2011 & 2015 (millions and % of total smartphone app revenues)

The forecasts from IHS Screen Digest are smaller than those from ABI Research, as ABI also counted subscriptions and in-app ads in its forecasts; IHS Screen Digest reported just in-app purchases and pay-per-downloads.

In-app purchases are an interesting aspect of mobile revenue, as a majority of such purchases are made by high-level or power users of applications, particularly games. In January, mobile app analytics company Localytics found that 44% of mobile application users who made an in-app purchase did so after their 10th session in the app.

Timeframe in Which Mobile App Users Worldwide Make Their First In-App Purchase, 2011 (% of total)

To continue to capitalize on in-app purchases, mobile app developers—and the marketers they work with—must get non-power users interested in making purchases, and include in-app purchase options in applications besides games.

Corporate subscribers have access to all eMarketer analyst reports, articles, data and more. Join the over 750 companies already benefiting from eMarketer’s approach. Learn more.

Check out today’s other articles, “Emails with Discounts Shared Most Often” and “Online Video Shows Promise in India.”



  • Go beyond the articles:

    eMarketer Products

    You've never experienced research like this.

  • Hear from our clients:

    Customer Stories

    Nearly all Fortune 500 companies rely on us.

  • Want to learn more?

    Contact Us

    Inquire about corporate subscriptions today.