With smartphones making up 56% of the mobile phone market in the UK and tablet ownership increasing to 24% of UK households, mobile internet and mobile app usage is rapidly increasing each year (Source: Ofcom Communications Market Report 2013). In a recent report from Distimo, mobile apps using the freemium business model have the largest share of the market. There are currently three main business models:
- Free apps with in-app purchases, known as freemium;
- Paid apps;
- Paid apps with in-app purchases.
Excluding revenues from advertising, freemium apps made up the majority of revenue across both of the main platforms Apple App store and Google Play.
Percentage of app revenues by business model
So far social networking has been the driver for the majority of mobile connectivity, however the rapid uptake of tablets seems to be providing a greater variety to mobile activity. I found the figures above suprising, but the trend to providing a free app with additional paid for functionality seems to be here to stay.