Free mobile app business model

The free mobile app business model is a popular way to monetize mobile applications. Instead of charging for the app itself, revenue is generated through other means, such as in-app purchases, advertising, or upselling to a paid version.

Key characteristics

• App store gatekeepers: Mobile apps are typically distributed through app stores, such as the Apple App Store and the Google Play Store. This can make it challenging to iterate quickly and experiment with new ideas.
• Multiple revenue streams: Free mobile apps can be monetized in a variety of ways, including:
  • In-app purchases (e.g., downloadable content, virtual goods, power-ups)
  • Advertising
  • Upselling to a paid version with additional features
• Focus on engagement: A key challenge for free mobile apps is to keep users engaged and coming back. This is essential for generating revenue.

Key metrics

Some of the key metrics for a free mobile app business include:

• Downloads: The number of times the app has been downloaded.
• Customer acquisition cost (CAC): The cost of acquiring a new user.
• Launch rate: The percentage of users who download the app and then launch it.
• Active users: The number of daily active users (DAU) and monthly active users (MAU).
• Percentage of users who pay: The percentage of users who make an in-app purchase.
• Time to first purchase: The time it takes for a user to make their first purchase.
• Average revenue per user (ARPU): The average revenue generated per user.
• Average revenue per paying user (ARPPU): The average revenue generated per paying user.
• Ratings and reviews: The number and quality of ratings and reviews in the app store.
• Virality: The rate at which users invite new users.
• Churn: The percentage of users who uninstall the app or stop using it.
• Customer lifetime value (LTV): The total amount of revenue a user is expected to generate over their lifetime.