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Linked by Jason Snell

Evolving App Store Business Models

This is a fascinating post from David Smith about the dramatic change in his app-development business in just the last four years:

The App Store ecosystem today is wildly different from what it was back then. I launched my first app into a store of around 90k apps, today we have well over 2 million. Back then we didn’t have advertising networks, in-app purchases or subscriptions. You were free or paid, and if you wanted to make a living you pretty much had to be paid.

Today things are quite different. Paid apps now make up a vanishingly small proportion of my income, and nearly all of my recent successes have come on the back of free apps. The transition between the two ends has not always be straightforward but I’ve focused hard on being adaptable and open-minded during the transition.

There are charts. And the charts make this story even more clear: In 2012 Smith made 90 percent of his revenue from people paying him. Today it’s 80 percent from in-app advertising.