IAP

Table of Contents

What are IAPs? What does IAP stand for?

4 Types of IAPs

IAP: iOS vs. Android

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What are IAPs? What does IAP stand for?

IAPs or In-App Purchases allow users to exchange real money via the relevant app store or other payment methods in exchange for consumable items, non-consumable items, and subscriptions.

Mobile applications took the world by storm largely due to the Apple Store release in 2008. In those early days downloading mobile apps typically cost an upfront cost; these apps were sometimes referred to as premium apps. It wasn't until 2009 when the mobile app Angry Birds was released on the app store with a price tag of $0.99 that everything changed. Angry Birds held the record for the fastest-selling mobile game in history with over 50 million downloads in just 35 days.

Fast forward two years to 2011 and the creators of Angry Birds released an entirely free version of the application with in-app purchases (IAPs). It did not take long for the mobile development world to take notice and follow suite. Now, in 2022, nearly ever mobile app is "free to download" with IAPs and advertisements as the primary means of compensation for app publishers.

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4 Types of IAPs

There are four major types of IAPs:

1. Consumables. Consumables are products that can be used once and then repurchased multiple times. One example of consumables would be buying extra lives or in-app coins and currencies.
2. Non-consumables. Non-consumables are products that you purchase once, have no expiry date, and remain permanently available within your app. In the world of gaming these could be new characters or new skins.
3. Auto-renewal subscriptions. Auto renewal subscriptions are products or services that you pay for on a recurring basis. Think Spotify, Apple Music, or even Netflix.
4. Non auto-renewal subscriptions. Non auto renewal subscriptions are for a fixed period and are usually for a longer period of time. Think Pay-Per-View boxing events.

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IAP: iOS vs. Android

Despite Android claiming the lions share of the market in 2022 for mobile devices, iOS users tend to spend far more per user than Android.

Why is this? Well iOS devices are more dominant in regions of the world where there is a higher GDP such as the US, Canada, and Japan compared to Android which is much more popular in developing markets like Africa, India, and Southeast Asia.

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