While the headline figure from Distimo's presentation deck from the Verizon Developers Conference was that 72 percent of revenue for iPhone apps comes from in-app purchases, that's not the whole story.
More striking is only 4 percent of iPhone apps include IAP.
The figure seemed so low, we had to check with Distimo that it was correct.
It is.
Freemium cash-in
The reasons are partly due to legacy issues, as IAP was enabled in June 2009, almost a year after the App Store launched.
The other is that although IAP works well for certain categories - notably games - the upfront paid model (or purely free) remains the most popular business model. Obviously, although games are the single largest App Store category, overall it's a minority.
Still, IAP is more popular for certain types of content.
According to Distimo's analysis, as expected, the proportion of free games that include IAP is significantly higher at 11 percent.
It's a similar situation with iPad apps; 7 percent of dedicated iPad content includes IAP, rising to 20 percent for free games
But, the conclusion remains that a mere 4 percent of iPhone content on the App Store is generating 72 percent of the revenue.
And that's why you should be including IAP in your games.
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Contributing Editor
A Pocket Gamer co-founder, Jon is Contributing Editor at PG.biz which means he acts like a slightly confused uncle who's forgotten where he's left his glasses. As well as letters and cameras, he likes imaginary numbers and legumes.
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