The world of mobile applications is a thriving industry that continues to grow at an astonishing rate, with the global market projected to reach $189 billion by 2020. With millions of apps available for download on platforms like Google Play and the App Store, it's no wonder that developers are eager to find innovative ways to monetize their creations.

When it comes to making money from mobile, desktop, or VR applications, there are several revenue models that can help app startups thrive. In this article, we'll delve into the most effective strategies for generating income, including in-app ads, in-app purchases, paid installs, and more.

Mobile Applications: The Bread and Butter of App Revenue

In 2016, a whopping 59% of gaming apps on iPhone and 54% of Android games relied on in-app advertising to earn an income. Fast-forward to 2017, and the trend remains unchanged – integrated advertising and in-app purchases remain the top revenue-generating methods for mobile-based apps.

Other monetization channels, such as paid installs, subscriptions, and affiliate deals, do bring in some profit, but they're not quite as lucrative as the tried-and-true methods mentioned above. According to recent data, here's how the worldwide revenue is distributed across different monetization channels:

  • Integrated advertising: 50% of all apps and game developers utilize ads to make money.
  • In-app purchases: A significant portion of mobile games and non-gaming apps offer additional content for an extra charge.

In-App Advertising: The Unsung Hero of App Revenue

Integrated advertising, often shortened to "in-app ads," is the most widely adopted monetization strategy for mobile apps. With over 50% of all apps relying on ads to make money, it's clear that this method has proven itself as a reliable revenue stream.

The reason developers choose in-app advertising is simple: people love free stuff, and they're more excited about free apps than paid ones. The more installs an app gets, the more money it can bring to the developer.

However, experts predict that in-app ads will become the main source of income for the mobile app industry by 2020, with video and display ads being the most widely used types of content.

In-App Purchases: A Freemium Business Model

The "freemium" business model is another effective revenue-generating strategy. This involves offering a basic app or game for free, while premium features or additional content can be unlocked for a fee.

Take Tinder, for example – the popular dating app offers in-app purchases that allow users to upgrade to premium plans like Tinder Plus and Tinder Gold. In the 2nd quarter of 2017 alone, Match Group reported that the total revenue from Tinder reached almost $310 million.

Paid Apps: A Niche Market

While paid apps may not be as lucrative as their free-to-play counterparts, they do have a dedicated niche market. According to recent research, paid apps earn only 7% of the world's mobile app income – a relatively small share compared to in-app ads and purchases.

However, paid apps can still bring in significant revenue, especially if they offer unique features or experiences that users are willing to pay for. Take Minecraft Pocket Edition, for example – this popular game has brought in over $5 million in revenue since its release in 2016.

Virtual Reality Apps: The Next Frontier of App Revenue

Finally, virtual reality (VR) apps represent a new frontier in app startup ideas. With VR technology continuing to evolve and improve, it's likely that we'll see even more innovative revenue models emerge in the years to come.

Whether you're looking to create a mobile game, a desktop application, or a VR experience, understanding the most effective revenue models is crucial for success. By embracing these strategies and adapting them to your unique app startup idea, you can unlock new revenue streams and take your business to the next level.