Apple Kickstarted the Freemium Revolution, says ABI Research

ABI Research’s new study, “Mobile Application Tracker Database,” says that ever since Apple enabled in-app purchasing for free apps in October 2009, “developers have been remarkably quick to evolve their business models.”

The report quotes Aapo Markkanen, senior analyst, consumer mobility, who explains that there is a bit of misunderstanding regarding the ‘freemium’ phenomenon in that “it isn’t only about monetizing, but also about marketing.”

Markkanen believes the download threshold is low, which signals that more people end up using and recommending said apps.

This, according to the analyst, “also gives those apps a bump in distributors’ ranking systems. This means that paid apps fail to draw attention in the first place.”

Practice director Dan Shey, agrees. He says “Apple has always had an edge against other app platforms in convincing users to pay, and if anything, the shift toward freemium is amplifying the dynamic.” He also said that Google needs to sort out Android Market’s billing process if it wants a piece of the pie.