Looking to build a mobile app startup? First look at the most profitable app categories

Mobile App Development is driven by a quest to make a user’s life easy, offer convenience. In the process, Mobile App Development businesses seek to make money by adding value. An app developed keeping user’s pain points in mind can be a thriving revenue stream for the business owner. In 2018, global downloads across iOS and Google Play surpassed 113 billion in 2018, a 10% increase from 2017. While global consumer spend has risen a whopping 20% year-on-year to over $76 billion, India has become the world’s fastest-growing market for mobile applications on both the Apple ioS and Google’s Android Play Store, with a sharp spike in revenue in the first quarter of 2018.

There are many categories of apps on app stores today. Profits of an app depend on its monetisation model a great deal. When categorised segment wise, some apps appear to be more revenue-bearing for businesses than others. If you are a business looking to bring in returns from app development you must steer clear of a low-income app segment and an inappropriate monetization model.

App Monetisation Models for Your App Business

A freemium model is the one that offers a user with a choice of in-app purchases. The characteristic feature of this app monetisation model is a limited software version. This software allows a user to use the app for free to access the product quality, before asking them to purchase it. It resembles the free demo approach.

Adopting the freemium model gives a business considerable advantage over its competitors. Allowing the user to check out the app for free, instead of asking them to pay upfront is a winning strategy. It builds customer loyalty.

If you do not want your app business to thrive on revenue from users, you can allow paid ads on your app’s user interface. Many owners work with developers to create app designs that display dynamic advertising content such that it complements the interface.
It is a common notion that UX quality degrades with ads. Even the most organically appearing ads can be irrelevant and create distractions for users. Sponsored messages also help with revenues but disappoint users. Unless you are confident about the quality and value of your content, skip opting for this revenue model.

Certain apps offer services to users that come at a price. Apps that facilitate payment, shopping, banking, and other such functions require to be subscribed.

These paid services in an app can be offered along with a premium plan model.

Most Profitable App Categories

Years of working with app businesses have helped our team of developers at Promatics to know which are the most profitable app categories yet. Here are some insights on the topic:

We are steeped neck deep into consumerism. In 2020, over 329 million people in India are expected to buy goods and services online, up from 130.4 million in 2016, according to a report published on Statista. Shopping through mobile offers convenience to shoppers. Once a consumer develops a knack for shopping online, it is easier for an app based online business to monetize traffic. Consequently, it won’t be absolutely ridiculous to say that retail apps on the market are in for the win.

Talking about profitability in a shopping app, its best practice to create premium plans with smaller fees. Developers must prioritize search results positioning in app design. In the end, a profitable shopping app is the one where you get creative in selling your value to the user. There is more to shopping apps than a simple catalogue installation and payment gateway integration. It is important to have a marketing partner in place to plan and execute strategies to help the app become a user’s favourite.

According to a Statista report, in September 2018, games apps were the most popular category, with a share of 24.86% of all apps downloaded from the apple app store. InJuly 2018, Candy Crush Saga alone earned $41.6 million. Numbers speak about the apparent lead of gaming apps when it comes to popularity among users. It has been an app niche that has seen constant evolution.

When it comes to monetisation, “free-to-play” is the norm. Even if you allow players to enjoy the game content free of charge, it is not necessary that you have paved way for in-app purchases. The format of the game and app outlay must offer the user high engagement to earn desirable profits.

We live in an age when mobile entertainment is highly valued among individuals. According to March 2018 stats for google play store, the second most popular app category is entertainment with 7.43% of all active apps. Especially as entertainment mobile apps offer prompt, seamless, portable and high-quality solutions to engage individuals, they are quite popular today. Entertainment app category comprises of apps that feature streaming, chatting, searching events, watching videos online and posting photos option among others. They hook the user to their content and features.

An ideal entertainment app comes with an interactive app interface, multiple sharing options and options for engagement. As customers are spoilt for choice with a variety of entertainment apps in the market, its best to have a proper monetization strategy in place from the beginning. Opt for the freemium model and make space for non-intrusive ads in your entertainment app.

At the end of March 2018, education apps were the most popular category with 8.29% of all active apps on the Google play store. A promising category for great returns, education apps guarantee a prolific retention rate. These apps add unique value and thus have a user returning to them time and again.

While the free version must be a valuable resource to the user. This category of apps can be built to feature “additional” premium content. The users need not be forced to upgrade, instead, he needs to be shown the full value that a paid subscription can bring in.

Recipe sharing, fashion, fitness, health and many other subcategories fit in the category of lifestyle apps. These apps contribute phenomenally in assisting patrons to pursue their lifestyle goals. Massive adoption of mobile phones in daily routines has spiked up the popularity of these apps today.

All apps in this category have their distinct niche audience. Thus lifestyle app business owners need to configure their own outreach strategy and monetisation model. Most people use lifestyle apps to cater to important functions and hence do not welcome distractions like ads. The paid-only approach does not fare well unless your lifestyle app executes a really crucial function. However, you can integrate helpful features of great value in the premium plan. You can charge a fee for every transaction made. Additionally, you can monetize the data obtained from usage patterns.

Conclusion

A Statista report suggests that by 2020, mobile apps are forecast to generate around 189 billion U.S. dollars in revenues via app stores and in-app advertising. This translates into vivid profitable opportunities for developers and app-centric business owners.

At the end of the day, profitable app development is not about what category has the most number of downloads or promising stats. Strategic app development includes choosing a niche where you can innovate and offer user something that is not there in the market. It is best to keep your focus on creating value for the customer through the app and then figuring out the best monetisation model for it. As a business owner, you need to choose the app niche that you have an understanding of.

Our team at Promatics Technologies has a versatile app development portfolio. We specialise in native, hybrid as well as web apps. Get in touch with your business app idea and let us help you execute it to perfection.

Note: This article first appeared at: A look at most profitable app categories

I live, breathe and dream mobile apps. My interest lies in pursuing and getting to know the best app development technologies, processes and platforms.