Revenues from in-app micro-billing to soar, says Juniper.
Annual revenue from value-added services upsold through downloaded mobile apps will exceed $14 billion by 2014, according to a new report from Juniper Research.
Of course, iPhone will start supporting in-app billing this summer as part of the upgrade to v3.0 of its OS, and Juniper expects other app stores to do the same.
The result being that what Juniper calls the 'freemium' business model – whereby applications are offered as a free to download with revenue coming from subsequent micropayments (to access game levels, for example) - will become increasingly prevalent over the next five years.
However, Juniper cautions that that widespread deployment of the freemium apps model would pose a significant challenge to operators, given that it offers the opportunity for much existing (and potential) content revenues to be directed through app stores (and the apps themselves) rather than operator distribution/billing channels.
Nokia, for example, will allow both operator and credit card billing on its content store where conditions allow. All iPhone App Store transactions are via credit card.
Article continues belowAdvertisement
Report author Dr Windsor Holden said: “Although consumers are likely to shift from purchasing content on-portal to app stores offered by vendors and OS providers, those stores in turn represent an opportunity for operators to realise far greater revenues from consumer data usage.”
