How Much Money Can an App Make in 2025?
China and the US are the leading mobile app markets. Statista's study states that mobile apps earned over 171 billion US dollars in 2023. Looking at this, It would not be a wrong statement if I say, the mobile app is a long-term commodity of business that is surely worth it.
The main source of generating income from the app is advertising and subscription models. If you also want to know how much do apps make from ads and how these apps earn money, then read this blog with proper attention.
Current Trends and Statistics for App Monetization
Earning of the app depends on the monetization strategy you apply. There are millions of Android and iOS apps, and some are free, keeping the users happy and still earning enough profit.
- AI, Internet of Things (IoT), blockchain, chatbot, AR/VR, mobile commerce etc are current trends these days. If you want to make good money from your app, then include trendy technologies in your app.
- Entertainment apps revenue increased by $1.72 dollars, and social media apps revenue increased by $980 million in the 2023 year.
- Reports show that customers are more interested in spending on AI apps. It has reached up to $10 million in revenue per month.
What Type of Platform Earns More Money?
The ultimate goal of every business is to earn money in the end. Studies show that the iOS platform earns more money because iOS users spend more happily on iOS apps.
One survey says that the Apple app store earned $85.1 billion in revenue in 2021 and the Google Play store did $47.9 billion.
Android has a large user base but still iOS earns more. There are many logical reasons:
People trust iOS apps more because they are secure, and updated from time to time and there is very little chance of downtime or malware issues.
There are many other factors for Comparison:
#1. Ad Type
iOS itself is a symbol of class and brand, advertisers spend more money on the iOS platform. Though Android has a growing user base but has comparatively fewer advertisers. Not sure but it keeps fluctuating as per demand.
#2. Revenue Models
The whole iOS app revenue cycle comes from in-app purchases, subscriptions, and freemium. Apple users have a habit of using premium services so they actually spend on premium features of apps.
#3. User Location
The Android app market is more across Asia, India, Africa, and the southeast. And the logical reason is here people don't spend money on apps unless the work gets done with free features.
On the other side, iOS is used in the US, Japan, Europe, and many other countries. They actually spend and purchase more.
#4. Content Verticals
In iOS, users spend more on content like health, fitness, entertainment, and productivity apps. Android users are more diverted towards games and other utilities. And mainly traffic comes from apps.
#5. Season and Size of the Ad
iOS and Android both platforms face fluctuations in user base with the change in demand and seasons.
Android mainly makes ads on a budget like banners etc. while iOS spends on ads that are long but engaging and convey the right message to the user.
#6. Currency Exchange Rates
You won't face problems in paying for iOS apps because they have a strong market presence and stable currency exchange rates. Android‘s currency rates keep fluctuating.
#7. Country and Regulations
Apple takes 30% as a commission for in-app purchases. This limits the developers in earning money.
Android is flexible in these terms. It does not charge much.
Key Factors Affecting App Revenue
You must keep these below factors in mind if you are thinking of developing an app.
#1. App Niche
Humans tend to have different interests hence the app niche you choose decides whether it will generate good revenue or not. We must admit that the rise of technology is benefiting us in many ways but at the same time, it is making us lazy.
Hence niches like fitness, health, gaming, and other productivity apps are in high demand. Research and choose the app niche that finds people more interesting and they really need it.
#2. User Base & Engagement
It is like a give and take relationship. You get what you give. The more great services you give to users, the more they will engage with your app.
And the most important thing, the app should serve its purpose for what users are using it.
Understand this, making them buy subscriptions is not the goal, satisfying users and retaining them for a long time is the prime goal.
#3. Market & Geographic Location
The location of users from where the app is gonna be accessed also affects the app revenue. Do research about the trend according to location and target audience.
Simply get this point, if your app is good, relatable to users and they want your service, nothing can stop them from becoming paid members. It's just you need to target the right audience that actually wants those features and services.
#4. Platform (iOS vs. Android)
As we discussed above, iPhones don't mind spending on app subscriptions. While Android users don't buy subscriptions unless the job is getting done in the free version.
The revenue of the app also depends on location, like the countries like US, and Europe, most of them are iPhone users, so if you target these countries, developing an iOS app is beneficial to get profitable returns.
#5. Audience
Who uses your app matters. For example: youngsters who are studying might not invest directly in the app, they will try the free version and then think about upgrading. But professionals who understand the app well and really need it will directly go for paid plans.
#6. Ad Formats
The huge mistake you could be making is displaying boring ads to the users and that to already bored users. Show your ads at the proper timing and with the proper format. No matter what type of ad it is, if you show it at the right time and right way, it will work.
#7. Ad Monetization Strategy
Feel free to mix different monetization strategies if it's working to increase revenue. What is important is it should have a balance between user experience and monetization.
#8. Price
I would suggest if you are a beginner in the app market, keep the nominal price and longer free version.
#9. Screenshots
Users are not gonna use your app properly if you don't have the right information on the Play Store. So make sure you are providing as much a detailed guide to the users from step-q download to how to use it with some screenshots and video too.
Everything is related, users will only use the app for a long time if the app is updated as per the competitive landscape and fulfills its objectives and legal standards.
Estimating Earnings Based on App Categories
This section is about app earnings based on the categories. Below are the app categories that have different earnings according to categories.
#1. Gaming Apps
Statista survey of 2023-24 says games are the highest-earning app categories. It generates over 55% of market revenue. Most gaming apps use IN-app purchases, especially as an extra bounty, free lives, etc. This keeps users engaged and buying stuff.
#2. Lifestyle & Fitness Apps
People are taking health and fitness seriously after the pandemic. After the covid, people are more using health and fitness from the comfort of home because they offer personalized diets, workout plans and track calories and many other health factors.
#3. e-Commerce and Marketplace Apps
These types of apps earn profits from sales commissions, affiliate partnerships, and ads. Here these influencers too play a big role by promoting the products on social media platforms.
#4. SaaS (Software as a Service)
If you are a professional or corporate person, the saas model is best for you. It targets the B2B and B2C markets. These apps have fixed pricing models. Zoom, slack, and Skype are some I can name, etc.
#5. Subscription-based Entertainment Apps
Do you know entertainment and OTT apps are the second-largest growing app market? They earn over 14% of revenue from the global market. The platforms like Netflix, and Disney Hotstar earn via in-app subscriptions by offering exclusive and premium content to the users.
#6. Dating Apps
We Genz obviously use dating apps. In fact, people of all ages prefer to use dating apps. One statistic shows that dating apps are gonna increase up to 58.8 billion by 2027.
Most of the revenue collection of these apps comes from the freemium model. Here users first try the free version of the app and once they enjoy using it, they upgrade to a paid one.
#7. Finance Apps
These days, many people need help with budgeting, finance, loan management, and more. BCG survey shows that finance apps are likely to generate $1.5 trillion in revenue by 2030.
#8. Social Apps
Statista survey speaks, there were over 4.26 billion social users in 2023 and by 2027, it is expected to grow to 6 billion.
Every app category's earnings are likely to fluctuate over time based on demand and performance. Hence before choosing any app category, do research, user requirements, budget and analyze what type of apps are loved by the people.
Future Projections: Earnings Potential Beyond 2025
The future of app development is definitely bright and it will also grow in the future with more interesting innovations. Below are some of the future scopes of the mobile app.
#1. AI and Machine Learning Integration
AI is king in today's generation and will also rule in the future. Nowadays almost all apps have AI chatbots and recommendations, which helps improve user experience. This AI and ML user’s past data to predict user behavior and learn about user’s choices and likings.
Predictive analytics helps in valuable engagement and convinces users to buy in-app subscriptions.
#2. Metaverse and Virtual Economies
AR VR and the metaverse apps have made the virtual world easily accessible for users. Not only in games but in fact, AR/VR is gonna be useful for every industry because it provides access to virtual objects and services and experiences them in real-time from comfort.
#3. Blockchain & Decentralized Apps (dApps)
Gone are the days when people used to go out and travel miles for work. The people have already started to invest in digital assets like crypto, token services, and smart contracts.
What are the Different Monetization Models for Apps?
#1. In-App Advertising
This model helps earn money by running ads. This is one of the profitable monetization models because the app gets clicks, impressions, and user sign-ups, and uses it for free so basically it's a good engagement.
#2. In-App Purchases and Freemium Model
In simple words, here apps' basic features are free and users can upgrade to paid ones according to their needs. This might include ad-blocking and premium services for a more improved experience.
#3. Subscription(Software-as-a-Service) Model
In this model, users pay monthly or yearly fees for their continuous services. For example: professional services or IT companies use particular software for their cloud storage or work management.
You can still keep free users connected to your app even if they cancel their subscription.
#4. Sponsorship
Sponsorship is also one of the effective ways of monetizing apps. Here developers partner with the brands or apps that have a good amount of regular users.
You can do this by deciding on a specific sponsorship fee or dividing earned profit revenue with the sponsored partner like 50/50.
#5. Crowdfunding
From the name, you can think of something like a fund given by a crowd, that can be in any form via donation, rewards, equity, or anything. It is an easy and affordable way to monetize the app. Plus you also get to test the audience for what works for the app and what does not.
You need a well-established brand for that and this method can take time.
#6. Affiliate Marketing
Affiliate marketing is basically a process where users or some popular influencers promote products or services on the app. And if anyone purchases from the affiliate link of your app, you earn a specific percentage of commission.
How Do Free Apps Earn?
Free apps can earn money in lots of ways. First of all, it's already a big plus point that the app is free so users won't hesitate to download and use it. Other than this below are the ways to monetize a profitable revenue from a free app.
- In-app Purchases: You can keep extra features that are unique and interesting and not available in the free version.
- Interstitial Ads: These are full-screen ads that pop up while you play the game. It acts as a natural break and attention seeker.
- Rewarded Videos: Have you tried to jump tasks or Swagbucks apps? These apps pay money for watching ads. There are also many apps that pay you for playing games and answering survey questions to collect useful data.
- Email Marketing: Free apps send promotional emails regarding discounts, offers, and seasonal updates to registered users of the app. If the user clicks on the link and makes the purchase, the app earns a specific percentage of profit.
- Selling Merchandise: Have you used eBay or Etsy to shop for anything? Actually, these are free apps that sell branded merchandise products physically to generate money.
- Physical Purchases: Here the app is linked with the e-commerce apps to buy physical products.
- Advertising: It is about banner or video ads that generate app revenue based on user clicks and views.
- Crowdfunding: Developers ask for money in the form of donations, or support to give them new advanced features in return.
- Native Ads: Native ads look the same as brand app design. It is more engaging so users convert and trust easily.
- Affiliate Marketing: Here the free app promotes the products and services of other brands on the app via an ad or any marketing form. Then the app earns a commission whenever the purchase is made via that link.
- Freemium Upsell: Apps have free trials available for a specific period of time or offer basic features for free of cost. Then ask users to upgrade to continue using the app or have advanced features.
- Data Monetization: You might have got emails, sms, or calls from other businesses where you have never been shopped. This is because the data you fill in at other apps is sold to a third party.
- Referral Marketing: You might have seen getting cash back at apps or some % discount when any user joins using your referral code. This is referral marketing.
- Sponsorship Model: In the sponsorship model, brands pay you to promote their services and products in the app.
- Transaction Fees: have you seen Paytm taking 0.80 or some minor amount of transaction fees from you whenever you make any payments? This is how the app earns via transaction fees.
- In-stream Video Ads: These are the video ads that are shown while you stream something online. For example: an ad is shown on mx player while you are watching some movie or series.
What are the Negative Impacts of The High Ads Monetizing Model?
These monetizing models also come with some minus points. Let's have a look.
- User Experience: Obviously the app will show ads and videos if you pay for the app. However, too many ads and videos can interrupt users and make them frustrated by repeated watching.
- Revenue: Don't over-rely on ads completely, keep trying different monetization models. If users have a bad experience, there is less chance they will buy a premium subscription to the app.
- Ad-blocking Software: We all are in a hurry, and no one is that much free to see ads again and again. Users are now smart and install ad-blocking software. So if they use this, there is no meaning of your ad spending because ads will get blocked automatically.
- User Data: if your app or monetization model asks for too much data, users might get uncomfortable or have privacy issues. he/she will directly click the close button.
- App Ratings: the majority of bad ratings are because of ads. This is not good for your user experience and future users who see these bad comments before installing the app.
- Over-Monetization: Don't over-monetize. Good things take time. Bombarding users with ads after every 5 to 10 minutes will make them lose interest in the app.
- Competition: understand this, minimal is always enough. If you show more ads, users do have many options in the market. They may move to other apps that are showing fewer ads.
Conclusion
So, that's all about app money-making. Like the above article? Next time, you develop any app, consider the above monetization models if you want to generate a fat revenue from the app in 2025. Users will only use your app if the service is good and subscriptions are budget-friendly.
If you have any stunning app ideas? Contact Expert App Devs and we will guide you through the app development phase to make your app earn more.
Frequently Asked Questions
#1. How do in-app purchases contribute to revenue?
In-app purchases are a monetization model for generating revenue for the app- also known as IAPs in short. In this, you can download the app for free and use it but once the free trial is over or if you want to access additional content, you will need a premium subscription.
#2. How much does app development cost, and when can I expect to break even?
If you are thinking of developing an app, it can range between $5000 to $133,000. The overall cost depends on the complexity, features, design, interface, and other factors. The app with a simple interface and basic features can be done from $5000 to $50,000. The app with moderate complexity can range from $50,000 to $12,000. An even more complex or tough apps can go up to $13,0000 or more than that.
#3. Is app advertising still profitable in 2025?
Yes, app advertising will be profitable in 2025 and also in the future. Mobile is always handy in today’s generation. Hence app advertising easily helps to target a valuable audience. It also helps in better engagement among large user bases.
#4. What’s the best way to estimate potential earnings from my app?
There are many ways to estimate the app's earnings. The potential earning of the app depends on the active users of the app and the conversion rate. Lead generation, user-based evaluation, your monetization strategies, and tools used for engagement like Google Analytics and other things can help you know the earnings from the app.
#5. How much can an app make you money in its first year?
At the beginning phase, users are likely to use free features and then slowly move to premium ones. So, mostly a small app can earn from $1000 to $10,000 and even more depending upon its demand and the type of app it is.
Moreover, it also depends on who you target, what strategies you choose, app niche, and more.
#6. What percentage of apps are successful?
According to research, only 0.5% to 1% of apps are successful due to tough competition in the market.
#7. What are the top apps that earn daily? How Much?
Some of the top apps that earn more are YouTube, Instagram, Candy Crush, and more. People love games and social media apps so obviously they have a large user base. Also the majority of influencers are on social media and YouTube both so yes they earn much.
According to Business of Apps research, in 2023, YouTube generated up to $31.5 billion in revenue.