The Economics of Mobile Applications in The New Palgrave Dictionary of Economics (Online Ed.), Steven N. Durlauf and Lawrence E. Blume (Eds.), Palgrave (2015)
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The huge and rapid explosion in mobile devices and apps has created a fertile ground for innovation and interesting challenges for evolution in this space. Mobile app marketplaces currently feature an extremely high supply of apps, creating intense competition to get noticed by consumers. This gives corporate developers an advantage, since they have existing marketing infrastructure to promote their apps. In the USA, popular developers are building apps for both iOS and Android platforms, allowing the coexistence of these platforms to persist. App developer strategies vary by market: those that make mobile game apps see success most often when building multiple different game apps. However, firms that make a non-game app are most successful when they focus on continuous improvements to only one app. Commercialisation strategies are also evolving: while advertising is the most common monetisation strategy, many app developers see higher revenue yields through in-app purchases. This article explores these issues in detail.