Google just introduced in-app purchases to the Android Market, after the function has proved highly lucrative for some developers on Apple’s App Store. At least, we’ve heard it’s a great way for developers to increase their cash flow, letting them offer a razor-and-the-blade retail model with a low or free upfront cost and delayed payments over time to add new functionality to the app. However, some recent figures from a developer suggest the in-app purchase picture may not be quite as rosy as has been painted.
John Casasanta of Tap Tap Tap posted some statistics for the popular Camera+ iOS app. Granted, we shouldn’t draw too sweeping conclusions from looking at just one developer, but Camera+ is pretty popular app, so its numbers might be indicative of the kind of sales that other developers are striving for.
Casasanta says that only about 5% of those users who buy the app also opt to make an in-app purchase for an expansion pack. While that still accounts for tens of thousands a month, it doesn’t make the case that these transactions are something that can be relied on for contributing to a major fraction of sales. We imagine that things would be even less lucrative with a free app, since in the Camera+ case, its users have already shown their willingness to pay when they bought the app in the first place.
Sure, a lot of the success or failure of in-app purchases is going to rely on just what sort of added value is offered, how heavily the add-ons are promoted from within the app, and how the developer chooses to price them, but they’re a far cry from a magic bullet for app-sale success.