451 Research projects that the number of mobile apps downloads will increase to almost 50 billion by 2017. While paid apps downloads continue to grow, a larger percentage of total downloads are free apps, this represents a challenge for developers and publishers.

1. New Models for Monetization:
From Paid Apps to Post-
Download User Engagement
Raúl Castañón-Martínez
Sr. Anayst, Enterprise Mobility
451 Research
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2. Agenda
 Mobile Apps Market Trends
 Market Growth
 Changes in Consumer Behavior
 App Store Revenues
 Average Revenue per User
 Pricing Models
 From Paid to Freemium
 Conclusions
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3. Mobile Apps Downloads Continue To Grow
 The number of mobile apps downloads will increase
to almost 50 billion by 2017
 Paid apps downloads continue to grow, but a larger
percentage of total downloads are free apps
 Despite a slowing growth rate in paid apps
downloads, app store revenues will continue to grow
through 2017
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4. Consumer Mobile Apps Downloads in the US Will
Nearly Double by 2017
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5. Monthly App Downloads Are Stable in the US, but
More of Those Downloads Are Free
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6. App Store Revenues in the US Will Increase
Despite Falling ARPU
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7. More Free Apps Does Not Mean Users Are
Spending Less Money
 In-app purchasing revenues have surpassed paid
apps revenues
 Freemium with in-app purchasing is becoming the
standard pricing model
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8. Users Aren’t Necessarily Downloading Free Apps
To Save Money
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9. One-Third of Consumers Have Purchased Extra
Content or Responded to Ads in Apps
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10. Freemium Represents New Business
Opportunities
 Downloading free apps does not always mean
consumers are looking for freebies
 Consumers are willing to pay for upgrades or engage
in advertising for free apps
 Consumers are paying for apps and upgrades using
virtual currencies
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11. Device Owners Are Engaging for Virtual Freebies
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12. Post-download User Engagement
 Monetization is shifting from a paid apps model to
post-download user engagement.
 This includes:
 In-app purchasing
 Upgrades using mobile advertising
 Virtual currencies
 There are interesting developments from companies
including Tapjoy, InAppFuel, ActionX and
TapCommerce
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13. Conclusions
 The U.S. market for consumer mobile apps has
undergone significant changes in the past four years.
 Pricing models are becoming increasingly complex.
 Monetization is shifting to post-download
transactions via in-app purchasing and mobile
advertising.
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