A new report from analytics firm App Annie finds that freemium apps now generate 69 percent of iOS app revenue and 75 percent of Android app revenue. In the past two years, revenue from iOS freemium apps has quadrupled and revenue from similar apps on the Android platform has increased by a factor of 3.5. Over the same period, revenue from paid downloads, the so-called “premium” apps, has remained flat.
The report also noted that the freemium model has become particularly important in Asia. For example, in Japan, freemium revenue from Google Play has multiplied 24 times in the past year along. Similarly, Chinese freemium revenue from the App Store has increased by a factor of 25.
In the freemium app model, initial downloads are available for free, but developers offer additional products or services related to the app for a fee.