At any given time, there are typically 4 to 5 million apps available for download from the Apple App Store and Google Play Store.

As per the Forbes, apps that are loaded with the capacity of in-app purchases make the most of the money for the app owners. The trend is expected to dominate in the coming years as well. Both the UK agencies and the other third-party advertisers are now getting keen on investing their maximum portion of advertising amount on the In-app ads. Unless the app is using iAd to display the advertisements, Apple is not directly making any money off free apps. In fact, free apps COST Apple money in order to host the app and deliver it to users. However, if developers offer paid versions of apps, that's where Apple will take their cut.

Of those 4 to 5 million, the majority are free to download.

Free? Yes, free.

Considering the capitalistic society that we live in, you have to wonder: How do any of these companies make money?

Believe it or not, free apps can actually generate A LOT of money for your business.

As we wrote about in our post How Do You Monetize A Free App In The App Store?, free apps essentially make money in the following two ways:

In-app advertisements
In-app add-ons, purchases and upgrades

Simple enough, you might think. But those two approaches aren’t right for every company, and they can be employed in many different ways.

In this post, we show you how six different apps have successfully leveraged a free pricing strategy, and how to translate their tactics to your own app.

1. The Facebook-Owned Global Powerhouse: WhatsApp

One of the most popular apps in the world in terms of active users, WhatsApp is a messenger app that connects the world using only the internet. It offers a service that wireless providers just cannot compete with. And it’s all free.

How It Makes Money

Unlike its competitors, WhatsApp is not monetized in either of the ways we mentioned above. In fact, it’s not monetized at all. So … does it actually make any money?

In the past, WhatsApp made money by selling the app for $1 to some users and charging others $1 after the first year. Probably recognizing the confusion created by this non-uniform approach, the company officially scrapped that model in 2016.

Despite originally charging some users, WhatsApp has maintained incomparable growth since its launch. Here’s what its first four years on the market looked like:

Graph source:https://www.forbes.com/sites/gordonkelly/2014/02/20/5-key-reasons-whatsapp-is-worth-19bn-to-facebook/#40adecf360d9

This insane growth (which continues today at a rate of 1 million new users per day) is almost certainly in part why Facebook valued the messaging app at $19 billion—the amount they purchased it for in 2014. Now, in 2019, the app still attracts consumers and small businesses by charging zero fees and showing zero advertisements.

Any revenue WhatsApp is pulling in probably comes from its Business API offering, which allows mid- to large-size businesses to maintain a profile and communicate with their customers. There are talks, however, about Facebook also opening up the messenger app to advertisers starting as early as this year.

What We Can Learn From This

WhatsApp is the perfect example of an honest-to-goodness free app. This is a rare pricing strategy that not all businesses can afford to adopt, but for Facebook, it’s kind of a no-brainer given the long-term potential.

Think of the data that’s piling up from the billions of messages being sent around the world every single day. Think of the groundwork that’ll already be laid should Facebook eventually choose to capitalize on the advertising potential.

Facebook is not dumb.

On the other hand, Facebook is also not poor, and they really don’t need to monetize WhatsApp right now—they can leave it be and continue raking in billions in ad revenue from their core platform.

The value of WhatsApp to Facebook may simply be the community of users that are enjoying the service. Adding an app to your offering for no other reason than to elevate the customer experience is not a bad idea… if you can afford to do so. Understandably, not every company is of the same magnitude as Facebook (in terms of size and revenue), and therefore couldn’t reasonably take advantage of such a luxury.

2. The Reason We Never Get Lost (Or Go Hungry): Google Maps

Google is another company that has its sights set on the future.

Its 2013 acquisition of the free navigation app Waze is one example. While some considered the purchase a strange move, Google knew that the social data it could mine from the app would be invaluable.

But unlike WhatsApp and Waze, Google’s own mapping tool is actually monetized, giving the company even more flexibility to think long-term.

How It Makes Money

Whereas some apps have only one revenue stream, Google Maps has several money-making avenues:

Advertising

The app pulls in ad revenue in two ways: promoted pins and local search ads.

In Google Maps, you’ll see colored pins marking nearby businesses—a fork and knife to signify a restaurant, a bed for a hotel, a shopping cart for a grocery store, etc. But if a company opts for promoted pins, their brand logo shows up instead of the generic pin, like the Denny’s in the screenshot below. You mainly see promoted pins in bigger cities where there are so many businesses competing for consumers’ attention.

Local search ads boost a business to the top of the Google Maps search results, increasing its visibility. Advertisers can even list special offers and product inventory right in the search results.

A cool added benefit to local search ads: Google can actually trace whether a user visited a business after clicking its ad.

Google Maps APIs

Google Maps also brings in money by allowing businesses to use its development platform to create customized map experiences. There are three types of Google Maps APIs:

What kind of apps take advantage of these APIs? Think about the on-demand apps you regularly use: Uber, Postmates, TaskRabbit… they all use map functionalities borrowed (that is, bought) from Google Maps.

Partnerships

Did you know that you can order food directly through Google Maps? Yep—the platform integrates with third-party services so that you can place an order without leaving the app.

Likewise, you can find an available Uber or Lyft in your area via Google Maps, and it will automatically direct you to the ridesharing app to book.

AR Ideas For The Future

Google execs have big plans for the future of Maps, which includes some augmented reality upgrades. For example, picture the details of nearby businesses appearing on your phone screen as you walk down the street—much like Pokémon appear as you move around in Pokémon Go.

What We Can Learn From This

How Does App Store Earn Money Now

Google Maps users expect to see detailed information about businesses and other points of interest. That’s why they opened the app in the first place—to locate a business, figure out how to get there, find the hours of operations, etc. And if a coupon or discount pops up while they’re at it, that’s an ad