According to information and analysis provider IHS Screen Digest 64% of the total mobile application revenue will be generated by in- app purchases within three years from now. While in 2011 in- app buys accounted for $970m (39%) of the total revenue, this number is to increase to $5.6 billion by 2015.
At the end of 2011, Android had a market share of 25% vs 13% for iPhone. Despite this, according to the app market analyst Distimo, in the US in 2011, the top 200 apps in the App Store for iPhone generated four times more revenue than the top 200 apps in the Google Android Market..
So the question is why does Android generate considerably less revenue than iPhone? One reason is that the barrier of paying for apps and other content is still higher for Android than for iPhone. To begin with, Apple requires credit card details from the customer in order to sign up for iTunes.
However all of this is changing soon. Operators such as Vodafone are enabling operator billing for Android Market. WAC is gearing up to launch an in-app payment API linked to the billing systems of all major operators in the world. The solutions enables users to pay for content and services through mobile apps by adding the amount to the monthly phone bill or charge their prepay credit. When in- app payment is as simple as clicking “OK”, micropayments will explode.
DMI is playing an active role in evaluating the future mobile payment services. We are currently implementing mobile payment solutions for the Appstores payment systems, WAC in-app payments, Google Checkout/Wallet, Paypal and credit cards. This means that you will see a lot more within this space very soon.