In-App Purchases Pay Off for Developers

A little over a year ago, Apple allowed developers to offer in-app purchases and now a third of the top-grossing iPhone apps use the freemium model, according to a GigaOM report.

A look at the top-grossing iPhone apps today finds 34 of the top 100 apps are free, but make their money through in-app purchases of mostly virtual currencies as well as other premium features. Remco van den Elzen, CEO of analytics firm Distimo, said he believes in-app purchases now represent about 30 percent of all iPhone App Store revenue. "We're seeing more developers implement more in app-purchases especially with games," he said. "Freemium Apps are also picking up significantly. A lot of developers realize it’s a successful model."

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