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How many apps are actually paid for?

There are download figures aplenty, but what data lies behind the headlines?

Although Apple announced last month that its App Store has passed the 1.5 billion downloads mark, it keeps other data on the store to itself.

Which is why when companies release seemingly reputable analysis, it makes headlines.

Such was the case with the latest Mobile Metrics Report from AdMob, which claimed that iPhone users download an average of 10.2 apps a month, while iPod touch owners are even more app-happy, downloading an average of 18.4 a month.

What’s more, AdMob put a figure to how much money the App Store is making from paid app downloads: $198 million a month. Or, if you like these things to be annual, it’s just under $2.4 billion a year.

Not bad, eh? No wonder there’s a gold-rush of developers scrambling to release apps and games on Apple’s store, while taking a more cautious attitude to its rivals (AdMob estimates that the paid app market on Android is worth just $5 million a month at present).

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owever, AdMob’s numbers are already being questioned by developers, doing their own sums based on their experiences on the App Store. As industry site Cult of Mac points out, $2.4 billion divided by 65,000 iPhone applications equals $37,000 per app per year, which seems extremely high. There’s no doubt that some apps are making much, much more than that. But many more are making much, much less.

All these back-of-a-napkin mathematics tie into the wider debate around how much money can be made on the App Store, and how much its customers are willing to pay for their apps.

AdMob estimates that 50 per cent of iPhone users and 40 per cent of iPod touch users buy at least one app a month. Which makes it pretty clear that the vast majority of apps being downloaded are freebies.

Is that a problem? Not necessarily. AdMob itself is, of course, touting its mobile advertising platform as a way for developers to make money from free apps – and has just bought rival AdWhirl to cement its position in the market.

Meanwhile, you can argue that those millions of people downloading free apps are arguably at least developing a healthy appetite for mobile entertainment which may turn into purchases in the future.

Never mind the revenues, celebrate the eyeballs? It’s been par for the course in the web world, but may stick in the craw of mobile firms used to assuming that consumers were prepared to pay for their entertainment.

However, with the likes of Rupert Murdoch kicking back against the free model online, let’s hope mobile isn’t having a similar debate a year or two down the line.

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