Free Apps Dominate 2012 Market, but Does that Mean the Paid App is Dead?

At first glance, it looks like terrible news for app developers; market research from late August projected that 89% of all apps sold in 2012 would be free apps. For those of you who want to take apps to market, this doesn’t look like the best news. Compounding the “bad news,” 90% of the apps that users did buy were sold for $3 or less.

Before we tell you what it all means, we’re going to give you a few more stats. The total amount of apps downloaded in 2012 was projected at 45.62 billion, with 11% of them paid for. In 2013, this number is expected to increase to 81.42 billion, with 10% of them being paid apps. In 2014, the number is expected to rise to 131.67 billion, with 9% being paid apps. By 2016, the total downloads are expected to reach 309.61 billion, with “only” 7% of them paid.

So, why aren’t we worried? Let’s take a look at two numbers here. Within four years, there will be nearly 7 times as many apps sold. 11% of 45.62 billion works out to 5.02 billion apps. 7% of 309.61 billion comes out to 21.67 billion. That comes out to slightly four times as many paid apps in 2016 as there were in 2012.

Better yet, look at the total amount of apps. This represents a golden opportunity for app developers to sell to businesses. Many of the free apps on the market will turn out to be free apps for restaurants and retail businesses who want to make it easier for their customers to buy from them. And even a free app can make plenty of money for developers if they leverage advertising effectively.

So, contrary to the first impression of many, these projections are great news for everyone involved with app creation and development.

Another prediction, which is a no-brainer, is that iOS, Android, and Microsoft apps will constitute most of the market. Cross-platform apps are a “wild card” at this point, and we have no idea how much market share Microsoft will claim.

If Microsoft becomes an equal to Android and iOS, it will mean that more apps will have to be developed to keep up with the demand for all three platforms.

In other words: the paid app is not dead.

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