Profitable App Development: 5 Categories Worth Considering

Originally published at on July 14, 2020

Gaining traction and developing a profitable app is a particularly challenging task in a modern, highly competitive business environment. As of the first quarter of 2020, there are 2.56 million apps available on Google Play, while the App Store offers almost 1.85 million applications. What’s more, according to market data, the number of smartphone users will reach 3.5 billion in 2020 and 3.8 billion in 2021. These figures tell a compelling story of consistent market growth and promising opportunities for those willing to delve into app development.

In this post, OpenGeeksLab has decided to provide some industry insights along with market analytics covering top-grossing apps for ensuring the success of your business idea, gratifying customers, and generating revenue.

Profitable App Categories Worth Considering

Five app categories currently dominate the mobile app marketplace, including music and video streaming, dating apps, social media and messengers, health and fitness, as well as gaming. Our team has dissected each category focusing on structure plus potential growth opportunities. Each category has its unique characteristics, monetization models, scaling potential.

1. Music and Video Streaming Apps

Music and video streaming applications were able to solidify their leading positions amongst non-gaming revenue leaders. Streaming capability was a common feature amongst top-rated apps in 2019, namely Netflix, YouTube, Tencent Video. Netflix as a trend outlier generated 20.15 billion U.S. dollars of gross revenue based on consumer spending in 2019.

Consumer spending only reflects the revenue side, which limits its capacity to show profitability levels. TechCrunch data shows that music streaming applications are consistently amongst top-ten based on this indicator amongst top-grossing apps with $16.63 million projected revenue in 2020. As of 2019, Spotify became one of the highest money making apps with more than €1.848 million revenue in Q1 2020.

Business models of these applications focus on paid subscriptions that provide access to general or premium content. Spotify reported 130 million premium subscribers in Q1 2020. Revenue consistency from subscription models is their main attraction for developers. Streaming apps were also encroaching on blogging since consumers were more likely to watch a video or listen to a podcast than read a blog.

2. Dating Applications

Online dating industry came in second place after streaming platforms as a non-gaming category. For instance, Tinder’s revenue for 2019 amounted to $1.2 billion. Dating applications are in high demand amongst consumers. Hence, around 220 million people are seeking relationship via dating services. The number of users is projected to reach 280 million within five years. Bumble, Badoo, Pairs, Tantan are also a part of the most-profitable apps based on their sales revenue.

Similar to other popular streaming platforms, dating applications utilize premium subscription service as their primary revenue source. This way, 5.9 million Tinder subscribers pay for a premium Tinder Plus/Tinder Gold exclusive features. Other profitable dating applications also offer similar services for generating revenue and/or maintaining sufficient profitability levels.

3. Social Media and Messengers

Despite the highest ranks of social media and messenger apps by downloads in 2019, they were unable to keep up with sales revenue and profitability of dating or streaming applications. Social media apps became their natural evolution after years of online existence. Besides, social media companies were actively acquiring messengers to complement their platforms. Thus, Facebook acquired WhatsApp in 2014 for $16 billion. As of 2019, Facebook also remained amongst top-grossing apps in this category with $70.697 million in total revenue.

While social media/messenger apps do not demonstrate the highest sales revenue levels through in-app purchases, they will remain ahead based on downloads as the most-profitable apps. Three top-grossing apps owned by Facebook ranked first, second, and third based on the number of downloads. Facebook Messenger, Facebook, WhatsApp Messenger are the highest money making apps. Developing messengers may imply their eventual sale to a larger company for complimenting its online platform. Acquisitions could lead to the rapid growth of this category supporting profitable apps.

4. Health and Fitness Apps

While health and fitness apps were not in the highest position, they also reported sales revenue growth. Specifically, top-ten profitable apps generated $7,4 billion of total revenue in 2019 in Google Play. In the Apple App Store alone, health and fitness apps reached the top 10 categories with 3.35% by share of available apps in June 2020.

Calorie Counter — MyFitnessPal, the leading health and fitness mobile app, reached 1.46 million U.S. dollars revenue. The second place comes to Calm — Meditate, Sleep, Relax, which increased its revenue $1.3 million in 2019 on an annual basis. Calm was in the same category as Shine, Fabulous — Daily Motivation, and 10% Happier apps in the App Store. These profitable mobile apps also serve as social media networks and messengers for athletes.

5. Gaming Industry

Games are the largest category of mobile applications in terms of their popularity and generated sales. In 2020, mobile games revenue worldwide amounted to $77.2 billion. Console games reached 45.2 billion U.S. dollars revenue, while PC games generated $36.9 billion in income.

Developing a profitable gaming app is a resource-intensive process that has an added layer of complexity. It relates to an additional gameplay design necessary for these most downloaded apps. It is possible to expect higher spending on the maintenance of gaming apps, as well as their lower profitability and return on investment.

Start Developing a Profitable App Today

Now, that we captured your attention and got your hopes up, it is fair to note that the failure rate in app development ranges between 80 and 90%. It means that it is quintessential to have a clear understanding of an app market structure and its core tendencies. It is also worth seeking help from professionals that use the necessary tools to turn your idea into a functioning application drawing attention and revenue streams.

The gaming industry is the most lucrative one, followed by music and video streaming apps, as well as dating applications. The most popular categories target broader markets with respectively high levels of competition. Developing a social media app would require competing against market leaders, such as Facebook and Twitter. Developing a messenger has a strong sale potential. Health and fitness app category is still growing with new devices offering development opportunities. Apps focusing on the community aspect with additional social features create new segments while demonstrating vibrant growth and development. Professional assistance makes a big difference in developing a profitable app. We are ready to assist you in this endeavor, so do not hesitate to contact us.