How Do Free iPhone Apps Make Money? The Truth Revealed

How do Free iPhone iOS Apps Make Money

“This content is for businesses, who want to make money from their free iPhone applications. Here, they will learn about different ways to monetize their free iPhone apps to earn a good amount of money.”

Many of you may have developed a free iPhone application and are now, wondering how free apps make some genuine money. Well, there are enormous free iPhone applications on the App Store, and Spotify Music and Clash of Clans are the top two grossing iOS apps in the App Store. These two applications are free of cost but still make lots of money.

In this world, where most users expect to get free applications, how would app makers get their expenses and profit after an average of 4 to 6 months of time? Now, you may think about in-app purchases and advertising that enable app creators to make money off their free applications.

But it’s not enough to make money from a free app, you have to go beyond and do more than just stick to paid premium options or ads in your app. Some of the genuine and smart app monetization strategies only come from an in-depth understanding of what revenue-generating options are obtainable, knowing yourself with your market, competition, audience, and business to deliver the right paid user experience.

Here are some of the main points that you need to know to make money off your free iPhone applications:

  • First and foremost, you need to research properly your market competitors so that you can know missed monetization opportunities.
  • Freemium applications are those apps that are free to download and offer additional features by paid access.
  • Within an application, in-app purchases are considered a great way to provide optional and paid features.
  • In-app advertising allows for making revenue from user click-throughs and impressions.
  • Through subscriptions, you can provide paid content or features for a particular time period.

Comprehend Right App Monetization Options

In-App Advertising

No matter what type of iPhone application you have for your business, in-app advertising is obtainable in different sizes, positions, and placements in mobile applications. The total amount of revenue you are making from in-app advertising is mainly based on traditional advertising models.

Through advertising, you can get paid differently for click-throughs, impressions, and the format of the ads, with videos tending to be worth more than static ads. There are different advertising networks that cater to iPhone app development companies, offering different models and formats within the in-app advertising strategy and metrics to keep track of how the ads are doing.

In-App Purchases

You can also make use of in-app purchases to sell a variety of content like subscriptions, services, new features, etc. This type of monetization option can be seen in gaming apps, where users are encouraged to buy some new levels, gear, and items. This type of purchase mainly boosts repeat purchases as they are mainly consumable like purchasing extra lives in games.

Moreover, there are four types of in-app purchases that you can offer to your iPhone app users, including:

  • Consumable – App users can opt for different types of consumables like gems, lives, or points in the game to get some extra progress through the app. These types of in-app purchases are used once and can be purchased again.
  • Non-Consumable – iPhone app users can also purchase non-consumable, premium features within an application. This type of in-app purchase needs to be purchased only once and they do not expire like some additional filters in a photo application. Apple can host content associated with your non-consumable in-app purchases.
  • Auto-Renewable Subscriptions – Users can also buy access to services and update their content like monthly access to cloud storage or any weekly subscription to a magazine. In this, users are charged on a recurring basis until they decide to cancel.
  • Non-Renewing Subscriptions – Users can also get access to services or content for a limited duration like a season pass to streaming content. This type of subscription does not renew automatically, so it is important for users to renew each time.

Identify Your App Market & Users

It’s time to do your research. You need to examine applications in the app stores like competitors and know the best practices for monetizing similar apps.

It would be quite difficult to conclude exactly how much money your competitors are making, but you can know the types of monetization strategies they are using and how they are framing their app content for ad impressions or optional transactions.

You can compare your techniques with your competitor’s techniques and ask yourself whether they are missing a major opportunity. Moreover, you also need to note elements of competitor apps you can improve on to boost your monetization strategy or flat out to make a better application.

Likewise, you can understand your users which is equally important as competitor research in developing your application. It plays a very important role in making a mobile app monetization strategy because there are only some of the users of your entire audience that will get ready to pay for something extra in your application.

You can research the demographics and tendencies of your audience and show relevant advertising for what they are looking for. For in-app purchases, you have to balance what your free applications are offering with the allure of extra and paid features.

Don’t Forget to Be Actionable

You should not forget the main aim of your application. Mobile users are classy and some of them only bear an application, which is only focusing on making money off advertisements or in-app purchases. Only successful and top-free applications pile their monetization efforts into the app so that they can feel like a normal part of the user experience.

Your goal should be to include only an easy yet simple actionable purchase system for in-app purchases, which makes sense within the application. The best in-app purchases are those that are instinctive and make sense within the context of the user experience.


So, these are some of the iPhone app monetization tips that help you to understand how free apps make money. Ensure that you focus and redefine your monetization strategy to your business goals, your market, and your users.

No matter what strategy you are implementing to make money off your free applications, you should track your data and monitor it to make sure your assumptions are right and for free to paid upgrades. Once you get the right data, you should try to be innovative and adopt new ways to make money with apps.

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