Think your app is the road to riches? Chances are you're very, very wrong

Summary:The proportion of apps that actually make money can only be seen with a microscope, according to analysts.

Don't mistake the number of mobile apps out there for a sign there are profits to be made, according to analyst firm Gartner, which is predicting only a tiny minority of apps will end up as financial successes.

If you're building a consumer app in the hope of finding riches, think again is Gartner's advice. The company is predicting that through to 2018 a mere 0.1 percent of apps will fall be considered a financial success by their creators, with free apps set to reign supreme over the next few years.

The shift towards free apps, supported by either in-app advertising or in-app payments, has to a large extent already occurred, but the trend will accelerate due to the sheer number of apps available.

With Google Play and Apple's App Store now home to around a million apps each and hundreds of thousands more being made each year, consumers are only going to find it harder to separate the wheat from the chaff. One common response from developers to the problem is making more apps free.

Free apps already dominate downloads, according to Gartner's figures, but are on the rise compared to paid-for apps. In 2013, free apps accounted for 91 percent of 102 million downloads, and are expected to climb to 94.5 percent of the 225 million downloads made in 2017.

The hunt for cash gets even harder amongst the small percentage of paid-for apps that are downloaded each year — Gartner analyst Ken Dulaney noted that 90 percent of such apps are downloaded fewer than 500 times per day, generating less than $1,250 a day for their makers.

"There are so many applications that are free and that will never directly generate revenue... This is only going to get worse in the future when there will be even greater competition, especially in successful markets," he said in a statement.

That apps aren't considered a success financially doesn't necessarily make them an out and out failure though. As Gartner notes, there are thousands of apps that were never intended to turn a profit, namely apps by retailers designed to generate loyalty or gather data about their customers to improve promotion targeting, apps from government agencies to raise public awareness, and gaming apps, which have increasingly favoured in-app purchases, which Apple began supporting in 2009.

And while today paid for apps still generate more revenue than apps that rely on in-app purchasing or advertising, Gartner last year forecast that revenue from in-app purchases will surpass paid-for app revenues by 2017.

Since the chances of an app directly delivering financial success are minute, Gartner advises developers in pursuit of money from their apps to thoroughly assess the concept, costs and opportunity of their creation.

More on successful app-making

Topics: Software Development, Mobility

About

Liam Tung is an Australian business technology journalist living a few too many Swedish miles north of Stockholm for his liking. He gained a bachelors degree in economics and arts (cultural studies) at Sydney's Macquarie University, but hacked (without Norse or malicious code for that matter) his way into a career as an enterprise tech, s... Full Bio

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