Are App Developers Shifting Revenue Models as Advertising Gets Challenged?
By Peter Farago, Flurry GM, and Aman Bansal, Flurry Analyst
Since the App Store and Google Play launched over a decade ago, advertising has enabled app publishers to offer free, high quality applications. Even when users fail to explicitly pay an app publisher for the use of an app, the publisher can still earn revenue. With 76% of all apps generating revenue from advertising, according to a recent Ad Colony survey, the ad revenue model has been a cornerstone of app monetization—at least until this year.
In 2020, two events have started to impact advertising revenue. First, COVID-19 has driven a large drop in ad spending. eMarketer initially forecasted U.S. mobile ad spending to grow by more than 20% in 2020, but due to COVID-19 ad spending is now instead expected to decline by 10%. Second, at WWDC in June, Apple announced that app publishers will soon be required to gain end-user opt-in for sharing data, which will cause an even larger drop in ad revenue. This requirement goes into effect when iOS 14 launches in September. While the stated reason is user privacy, which Flurry supports, opt-in rates are expected to be so low that Apple’s IDFA, the key identifier used for advertising, will become largely unusable. Think of it as de facto deprecation. With the removal of this identifier from the ecosystem, the IAB estimates that publisher ad revenue will drop by another 52%.
For this study, Flurry looked at what revenue models app developers have been using in 2020 and whether those have been shifting over the course of the year. With ad revenue under siege, we wondered if app developers are showing signs of moving toward more paid models. Flurry Analytics, owned by Verizon Media, is used in over 1 million mobile applications, providing aggregated insights across more than 2 billion mobile devices per month. For this analysis, we identified 3,500 unique applications that use ad revenue, in-app purchase or a combination of both to monetize their applications. We limited the sample to include apps that have a minimum of 10,000 monthly active users. Let’s start by looking at which revenue models were used at the beginning of 2020, before the impact of COVID-19 began.
The side-by-side donut charts above show which revenue models were used by app developers at the beginning of this year for both iOS and Android. We grouped models by Ads only, In-app Purchase (IAP) only or using a combination of Ads & IAP. At a high level, app publishers use IAP more on iOS, and Ads more on Android. 38% of apps use IAP on iOS versus 28% on Android. Likewise, the number of apps that use a combination of IAP and Ads is slightly higher on iOS at 23%, versus 21% on Android. When it comes to monetizing only with advertising, 52% of apps do so on Android versus just 39% on iOS.
We next took a snapshot of revenue models in July and compared that to the January baseline established in the charts above. By then, COVID-19 had deeply impacted advertising spending, by as much as 30% according to eMarketer. Additionally, Apple had made its announcement regarding use of the IDFA in June. While the impact of this announcement might not have been fully understood yet, the news was out.
The chart above shows the percentage point change in revenue models used within applications from January 2020 to July 2020. On the left we show iOS, and on the right we show Android. The total changes within a platform balance out to zero between ‘Ads Only’ versus the sum of ‘Ads & IAP’ and ‘IAP Only.’ For example, on iOS, the percentage points of apps using Ads Only declined by 3%, while the sum of Ads & IAP and IAP Only increased by 3%. On Android, ‘Ads Only’ decreased by 6% where the sum of apps using IAP increased 6% (+2% Ads & IAP and +4% IAP only). What this chart tells us is that app developers are shifting away from using only advertising for monetization on both iOS and Android. To date, we believe the main driver is due to the drop in ad spending as a result of COVID-19. While Apple’s announcement may lead to a larger, longer-term impact to ad revenue viability, the effects are not yet fully understood or realized. It also makes sense that Android is seeing a larger drop in apps that use advertising only to earn revenue since Android is known to be the platform where ad revenue tends to perform better. Google, with its roots in advertising, has invested more in enabling ad revenue generation over transactions such as in-app purchases. Now that we’ve looked at the revenue model shift by platform over time, let’s drill down to see changes at the app category level.
The above chart compares the change in app categories using an advertising only revenue model for monetization between January 2020 and July 2020. In gray, we show the percent of apps within a category using advertising only, and in blue we show the percent of apps using advertising only as of July 2020. And we ranked the categories in descending order based on using advertising only to generate revenue. At the top of the chart, you’ll see that News & Magazines, Education and Business app categories use advertising to generate revenue more than other app categories. By contrast, at the bottom of the chart, you’ll see the categories that rely least on advertising exclusively for revenue. From the bottom up, those are Games, Photo & Video and Social. Note that apps in these categories may still use advertising as a main way of monetizing but that revenue is blended with other models. This chart shows apps that use advertising only, and no other revenue models. For example, around 35% of game apps use advertising only. The rest of game apps use a blend of Ads & IAP, or IAP exclusively.
As app developers face the prospect of declining ad revenue, and in particular from changes brought about by iOS 14, we expect there to be a shift toward paid models. In this future state, developers with a dependency on ad revenue may prioritize their Android apps over iOS, for as long as Android supports advertising. It still remains to be seen whether or when Google might follow Apple to enforce a similar opt-in tracking policy. We’ll continue to monitor which business models are employed by app developers as iOS 14 rolls out and beyond. For the latest mobile insights and to share those insights with others, please consider also following us on Twitter and LinkedIn.
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Apple Is Just Three Weeks Away From Showing Off IPhone 14
10 Min Read
Apple is preparing to deliver the new iPhone 14 sooner than expected, giving its ongoing quarter additional product support.
As revealed last week, the organization is intending to declare the iPhone 14 at an occasion on Sept. 7. It would be the earliest iPhone send-off starting around 2016 and be trailed by the new gadget going marked down on Sept. 16 — about seven days in front of last year's timetable.
The occasion will be on the Wednesday after Labor Day, an abnormal day for Apple product dispatches. It flags that the organization needed to leave that Tuesday free. Why? Maybe on the grounds that the press and different visitors will require a movement day after the Monday occasion.
The approach firmly proposes that the organization will have an in-person occasion on its Apple Park grounds for the iPhone send-off, like how it helped WWDC in June.
The actual show will in any case be conveyed on the web — similarly, as Apple has finished with occasions all through the pandemic — yet the organization may likewise show the video live to a group at its grounds.
In that situation, you can anticipate that individuals from the press should get their hands on new gadgets subsequently, similarly to the upgraded MacBook Air in June.
Apple Feature Occasion Greeting
An in-person occasion would be essential for a more extensive move by Apple to restore things once again — or, at any rate, somewhat more typical.
Around that equivalent time, the organization will start requiring its corporate representatives to work from its Silicon Valley workplaces no less than three days per week: Tuesdays, Thursdays, and a third day chosen by their singular group.
We're still distant from getting back to pre-pandemic the same old thing. However, the mix of an on-location media occasion and in-person office work could cause it to feel like Apple's most typical fall since the iPhone 11 was sent off in 2019.
The one kink is the sooner-than-regular day for kickoff. Since Apple started revealing iPhones in the fall of 2011, there's just been one send-off that was this early: the iPhone 7 of 2016 (before 2011, Apple sent off new iPhones in June or July).
Here is the set of experiences:
iPhone 4S: declared Oct. 4, 2011; delivered Oct. 14
iPhone 5: declared Sept. 12, 2012; delivered Sept. 21
iPhone 5S: declared Sept. 10, 2013; delivered Sept. 20
iPhone 6: declared Sept. 9, 2014; delivered Sept. 19
iPhone 6S declared Sept. 9, 2015; delivered Sept. 25
iPhone 7: declared Sept. 7, 2016; delivered Sept. 16
iPhone 8: declared Sept. 12, 2017; delivered Sept. 22
iPhone X: declared Sept. 12, 2017; delivered Nov. 3
iPhone XS: declared Sept. 12, 2018; delivered Sept. 21
iPhone 11: declared Sept. 10, 2019; delivered Sept. 20
iPhone 12: declared Oct. 13, 2020; delivered Oct. 23
iPhone 13: declared Sept. 14, 2021; delivered Sept. 24
As far as I might be concerned, this implies a couple of things. To begin with, Apple will get an extra seven-day stretch of iPhone 14 deals in its monetary final quarter, which goes through September. Apple had been confronting an extreme correlation:
Its deals rose 29% in the final quarter of 2021 from 2020, making it hard to match that development. One more seven-day stretch of iPhone 14 deals ought to help the organization effectively beat last year's $83 billion imprint (to be sure, investigators are as of now projecting an income of about $89 billion).
Second, the timetable proposes that Apple's production network is as yet functioning admirably — essentially with regards to the iPhone — notwithstanding waiting for chip deficiencies and increasing expenses. The equivalent can't be said for the Mac and iPad, which experienced supply limitations last quarter.
Apple Hosts Worldwide Developers Conference
Third, Apple needs to make more space in front of a subsequent occasion to make arrangements for October. Long before the pandemic, Apple ordinarily sent off the new iPhone and Apple Watch together in September, followed by new iPads and Macs together in October.
This year is turning out to be a re-visitation of that organization, with Apple probably making arrangements for the appearance of new Macs and iPads about a month after the iPhones.
For October, I would expect a redid iPad Pro with an M2 processor and a refreshed passage level iPad with an A14 chip and USB-C port. As far as PCs, Apple has been dealing with M2-based renditions of the Mac smaller than normal, Mac Pro and MacBook Pro, so I believe we're probably going to see basically a couple of those machines around two months from now.
There's as of now proof that this approach is in the offing when we take a gander at the organization's fall programming discharge methodology.
The iOS 16.0 update, which Apple engineers completed work on this previous week, is because of the send-off in September close by watchOS 9.
Those updates will compare with the new equipment. The macOS Ventura and iPadOS redesigns, then again, are presently booked for October (after Stage Manager-related postponements to the iPad programming) to match the new equipment arrangement.
The following inquiry is: When will Apple really report its Sept. 7 occasion? In light of the previous history, I'd envision between Aug. 29 and Aug. 31, so we're going into iPhone send-off season in simply a matter of days.
iPhone 14 Unveiling Schedule
Sept. 7: Apple to hold its fall iPhone and Apple Watch occasion. Apple is preparing for the unveiling of the iPhone 14, which falls on a Wednesday.
Search for the organization to stream the occasion on the web however hold an in-person segment for media to get their hands on the new gadgets. With respect to what's on draft: Expect the iPhone 14 line and three new Apple Watches, including a standard release, a SE rendition and the primary Pro model.
Will iPhone 14 Be Worth The Effort?
The iPhone 14 release is approaching rapidly with the current year's setup expected to incorporate various redesigns and changes. While it's not difficult to get sucked in by the energy of another iPhone, a significant inquiry to consider is "will the iPhone 14 be worth the effort?" Follow along for some assistance finding your solution.
Whether you'll view the iPhone 14 as worth an update will come down to how significant and important you track down the progressions and elements - or likewise could simply be tied in with having the most recent tech.
However, there's another thing to consider this year, Apple might expand the cost of the new Pro iPhones by around $100.
One of the greatest changes to show up with the iPhone 14 is Apple dumping the indent that began with iPhone X and has been available on the lead iPhones since.
The 2022 iPhone setup is supposed to see another pill-formed pattern, a more negligible method for lodging the TrueDepth Face ID camera, and sensors, and that's just the beginning.
iPhone 14 - New Sizes
The latest iPhone 14 setup ought to carry a major purge to what we've seen throughout recent years. In a 9to5Mac selective report, we uncovered that Apple is dropping the iPhone smaller than usual and will rather offer an iPhone 14 Max close to the iPhone 14, 14 Pro, and 14 Pro Max.
Also, the Pro models ought to have marginally bigger screens.
Selective: iPhone 14 comes in four models without 'small' form, Pro models with a taller screen
iPhone 14 Camera Overhauls
The iPhone 14 will likewise highlight huge improvements to the forward-looking camera, as per Kuo. Significant changes will be made to the forward-looking camera's auto-center elements and iPhone 14 Pro and iPhone 14 Pro Max being moved up to 48 megapixels, an increment from the 12-megapixel sensor in iPhone 13.
Kuo likewise accepts the camera framework will be updated, supporting 8K video recording interestingly. In the interim, the camera knock is supposed to stay with the new iPhones.
Lightning or USB-C?
Apple has been rumored to be dealing with a port-less iPhone for quite a while. Notwithstanding, that as well as a USB-C iPhone aren't normal this year.
The change to USB-C could occur in 2023 as we've seen anticipated by both Kuo and Bloomberg, however, anticipate that the iPhone 14 setup should stay with Lightning.
There is an opportunity we see Lightning get USB 3.0 paces this year, yet that rumor is problematic.
iPhone 14: A16 And A15 Chip
Curiously, this year seems as though it very well may be the primary that Apple carries an alternate chip methodology to the iPhone setup.
By and large, all of the new iPhones reported get Apple's most up-to-date A-series chip, yet this year Apple is supposed to offer the A16 in the iPhone 14 Pro and 14 Pro Max as it were. That would mean the iPhone 14 and 14 Max would keep a similar A15 chip as the entire iPhone 13 setup.
It's difficult to tell how much execution improvement Apple will actually want to carry with the A16 chip, the truth will surface eventually.
iPhone 14: Contact ID?
Early iPhone 14 rumors said Apple would bring under-show Touch ID to the 2022 iPhone, however, this no longer gives off an impression of being occurring.
A new report from Ming-Chi Kuo says that Apple needed to defer under-show Touch ID - conceivably even past 2023. That implies the iPhone 14 will stay with Face ID as the biometric recognizable proof.
iPhone 14: Cost Increment?
Typically Apple keeps the new iPhone arrangement evaluating generally equivalent to the past models (when they were initially sent off). In any case, a change this year in the midst of extreme financial circumstances could be a cost increment.
Ming-Chi Kuo as of late made anticipations about iPhone 14 Pro and Pro Max price will be around $100 more costly this year. Notwithstanding, it's precarious in light of the fact that we're anticipating that Apple should drop the iPhone smaller than expected and present the 14 Max this time around.
Peruse erring on this in my associate Chance's article:
The uplifting news about Apple's rumored iPhone 14 Pro cost climb: Cost drop on iPhone 13
As is dependably the situation, when Apple dispatches the iPhone 14 setup, estimating on the iPhone 13 (and 12, and so on) drop. Also, transporters frequently offer convincing promotions on the year-old iPhones.
Remember to remember that for your recipe to sort out whether or not the iPhone 14 will be worth the effort for you.
Will iPhone 14 Be Worth The Effort? A Wrap-Up:
All things considered, choosing how significant the iPhone 14 elements/changes are will decide on "will iPhone 14 be worth the effort?"
One explaining inquiry to pose to yourself is after the underlying promotion of getting another iPhone wears off, what amount of a distinction will the beneath elements and changes really make in your everyday life?
Pill-molded pattern
Camera overhauls
New sizes (iPhone 14 Max and somewhat bigger for 14 Pro and Pro Max)
A16 for Pro and Pro Max models, A15 for non-Pro models
Conceivable cost increment on new Pro models and cost drop on past models
What is your take? Is it true or not that you are as of now set on getting an iPhone 14?
Apple to deliver the iPhone 14 on September 7, promotions coming to Maps
As indicated by a genuinely solid source with regards to Apple, the organization is wanting to send off the new iPhone 14 family prior to this year no matter what the inventory network imperatives and expanding chip costs.
This means that Apple has gotten sufficient equipment for its iPhones.
One more justification for Apple's rush is probably an October occasion. A few experts accept that the firm will deliver new Macs and iPads at that one, so there ought to be sufficient time between the two occasions.
Another fascinating piece is Apple's arrangements to present promotions in its Maps application. The paid query items will be supplanted with flag promotions and remember another tab for the App Store called "You Might Also Like".
Presently, the organization records about $4 billion every year from publicizing and plans to push that to around $10 billion.
Apple intends to make iPhone 14 in India in the midst of China's troubles
The Bloomberg report says Foxconn has concentrated on the process of delivering things from China and gathering the iPhone 14 at its plant outside the Indian city of Chennai
Apple Inc intends to begin fabricating the iPhone 14 in India as the US tech goliath looks for options in contrast to China after the Xi organization's conflicts with Washington and lockdowns the nation over upset production, Bloomberg
iPhone 14 News Detailed
The organization has been working with providers to increase production in India and abbreviate the slack in assembling new iPhones from the common six to nine months for past send-offs, the report said on Tuesday, referring to individuals acquainted with the matter.
As per the report, Apple's Taiwan-based provider Foxconn has concentrated on the process of transportation things from China and collecting the iPhone 14 at its plant outside the southern Indian city of Chennai.
Production of the principal iPhone 14s from India is probably going to be finished in late October or November, the report added.
Apple didn't quickly answer Reuters' solicitation for input.
The organization has been moving areas of iPhone production from China to different business sectors including India, the world's second-greatest cell phone market, and is likewise wanting to gather iPad tablets there.
India and nations, for example, Mexico and Vietnam are turning out to be progressively essential to contract makers providing American brands as they attempt to differentiate production away from China.
Apple expects stable iPhone 14 deals, and orders accomplices to make 90M units
Apple expects solid iPhones in the following year notwithstanding the financial slump, a report by Bloomberg uncovers. Cupertino requested its constructing agents to adhere to a 90-million objective for the iPhone 14, which is equivalent to iPhone 13.
The organization is additionally expected to make 220 million gadgets arranged for the rest of 2022, a similar number as it did a year ago.
Apple expects stable iPhone 14 deals, and orders accomplices to make 90M units
As per Bloomberg, Apple is sure it will climate the financial difficulties different producers are encountering in a market that declined 9% in Q2 and with a projected 3.5% downfall for the year.
Taiwanese iPhone constructing agent Pegatron, Japan Display, TDK Corp, and Murata Manufacturing all had rising offer costs after the news broke out.
The death of premium gadgets from Huawei and the oversaturation of Android gadgets, as a rule, is bringing more grounded interest for Apple's new setup, examiners uncovered. Hon Hai Precision Industry, the organization that assembles the vast majority of the iPhones, expressed that "the offer of hardware products ought to be minimally changed in 2022".
Apple expects stable iPhone 14 deals, and orders accomplices to make 90M units
We expect four Apple iPhone 14 adaptations altogether to be declared one month from now. We are probably going to see new cameras, a poke hole plan for the improved selfie camera and Face ID, and another A16 Bionic chip is likewise all together.
You may check out the following:
iPhone 14 Leaks & Gossips
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Samsung Galaxy S22 Ultra Cases
Source : https://www.casecoinc.com/blogs/news/apple-is-just-three-weeks-away-from-showing-off-iphone-14
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