APP STORE BUSINESS MODELS
Now that you've gone through some basic considerations, let's take a more specific look at most of the business models currently in the App Store. Chapter 7 examines the differences of creating free and “freemium” apps (those where you are limited in content without in-app purchases), and Chapter 8 explores paid and premium apps (those that are above the $4.99 price point).
Free apps are not the same as free-to-play — or “freemium” — apps. The free-to-play models have a significant content restriction that requires an investment of real money to unlock, and are discussed in detail in Chapter 7.
Free apps fall into two categories: apps that have all their content available, and lite versions (which, in most cases, are content- or time-restricted versions of paid apps).
Free and Lite App Revenue Models
Free apps that are not lite versions are almost always ad-driven, as are the occasional lite versions of paid apps. Sometimes the only difference between the free and paid version is the removal of ads, which can be quite an incentive for some users, depending on how intrusive they are versus how addictive or practical the app is.
Many third-party ad networks exist such as AdMob and JumpTap (see Appendix B for a good list). However, a reliable source that doesn't take you out of your app for ads was released in 2010 — none other than Apple's own iAd (http://developer.apple.com/iad/). Ads delivered via iAd are typically heavy on animation and user ...