Winning second position, total apps downloads from iTunes stand over 3 billion, with record monthly sales of over $200 million. How could you not take this lucrative opportunity to build an iPhone app and monetize it? Well, it is easier said than done. Apple receives around 10,000 app submission every week, and that’s a lot of competition. Even for experienced app developers, it is a big challenge to build an iPhone app and make its place in iTunes, forget making money from it! However, if you already have an established app or are planning to build one, you can possibly make money from it by using certain proven tactics.

Discussed here are the best ways to monetize your iPhone app and earn revenues.

1. Sponsorships

Having your app to sponsor other products and services is one of the best ways to make money from your iPhone application. In this tactic, your app works as a platform to advertise other products and services, and earn revenues from such paid advertisements. However, for that, it is crucial to know the target audience of your application. This makes it easier to find products and services that your target audience would be interested in. For example, an app designed for athletes or runners could get sponsorships from brands like Reebok and Nike.

Advertisements may be in the form of having the company/brand logo at the bottom of the screen, or an ad showcasing their sports shoe category. However, the ad should be marked as sponsored content, otherwise your app users may feel deceived. Alternatively, you can also sponsor other iPhone apps (not competitors) that belong to the same niche and could be useful for your target audience.

2. Freemium

This is, by far, the best and most popular way to make money from your iPhone app. The objective is to build interest among your target audience by offering a limited version of the app for free, and then inspire your users to upgrade to the premium (paid) version. In-app purchases rake in over 76% of all total revenues in Apple iTunes App Store in the United States alone, and over 90% in the Asian markets, reports Distimo.

The strategy is to offer a basic version of the iPhone app for free, with limited content, features or virtual products and services. Once they find value in it and are hooked to the app, encourage them to get the premium version that let them buy additional features or content update for a fixed price or monthly subscription. Thus, you are not only able to build a strong user base, but also drive money.

3. Sell In-App Features

In this tactic, the app is free, but to get some additional features, the user has to make in-app purchases. This is one of the most common platforms for monetization, similar to Freemium. By making in-app purchase in a game, you can unlock more levels or get more lives. Take, for example, Duolingo, a popular language learning application that enables its users to learn languages from basic to advanced level for free. However, users can also use bonus skills, idioms, or pick-up lines to learn the language, but by paying a certain amount.

4. One-time Paid Apps

This is the most common form of monetizing your iPhone app. In this strategy, users pay only once to download the app. All later updates or feature additions are generally free. However, why should users download a paid app when there are tons of others available for free? Considering this fact, it is vital to make your app compelling enough to have your users pay to download it. Another big challenge is that since you do not have a consistent revenue stream, you have to search new customers each time. Most one-time paid apps provide the core value and feature in the first download, and then add only minor design tweaks and usability enhancements.

5. Paid Apps with Additional Features for a Fee

If having a one-time paid app does not suffice your purpose, having this hybrid monetization strategy can help, though it is often criticized for being unfair to users. In this model, users have to pay a certain amount of money to download the app, and then pay again to get additional features. Such type of app may be tricky to build, but when done smartly by rendering a value to users, it can work well.

6. Sell Merchandize through your App

If you have an iPhone app that can be used to sell different varieties of merchandise, make full use of it to earn revenues. But make sure that the merchandise you sell is related to the app or the niche market it targets. According to studies, you can make serious cash by selling merchandise through your applications, sometimes about 50% of the sales. An example is Evernote, where one can buy coffee mugs, t-shirts, pens, mugs and more.

7. CPI Network

As discussed earlier, you can use your iPhone app to promote other apps, and get paid every time someone installs a promoted app via your mobile application. This is a good way to get paid pretty well, as well as increase traffic to your app.

Conclusion:

Making money with your iPhone app is not simple. It is important to have a solid strategy that is based on understanding of your target audience and type of app you have built. The above strategies, in addition to the above, can be a good way to monetize your app and earn revenues, and at the same time, keep your users engaged and loyal.