A year after Apple began allowing free apps to include in-app purchases, 34 of the top 100 grossing iPhone apps are free. They make their money through in-app purchases of mostly virtual currencies as well as other premium features.
In January, there were just two freemium iPhone apps in the App Store among the top 50. Now there are about 20 apps among the top 50 grossing apps with in-app purchases.
Freemium apps are still a small percentage of apps overall. The percentage of free apps with in-app purchases has increased from 1.10 percent in the second quarter to 1.34 percent in the third quarter.
The largest portion of in-app purchases are in games (3.8 percent) and social networking apps (4.3 percent).
The ten top-grossing iPhone apps include Restaurant Story (#3), Tap Zoo (#4), NBA Game Time 2010-2011 (#7), Haypi Kingdom (#9) and Kingdoms at War (#8).
But it’s not just gaming apps. The New York Road Runners Marathon App, which allowed real-time tracking of the marathon, went for $3.99, and shot to No. 1 during the race. The NBA Game Time app also hit No. 1 with its ability to receive videos, highlights, radio feeds advertising free.
Meanwhile, the iPad, with its generally higher price points for paid apps, isn’t as lucrative for freemium apps compared to paid apps. None of the top 100 apps on the top-grossing list are free.
Freemium has been popular in Asia for years with pioneers like Nexon leading the way, and has also been the model of choice for Facebook games, helping Zynga achieve a $5.5 billion valuation. IPhone games publisher Ngmoco switched early to a freemium model and hit No. 1 on the top-grossing chart with Eliminate Pro.
Are you considering switching to the freemium model for your next iPhone app?