The rules for making money from mobile apps changed more in the past 18 months than in the previous decade. A landmark court ruling blew open Apple's payment monopoly. AI apps proved that users will pay $20/month for the right tool without blinking. And the subscription-only model that dominated for years is giving way to something more flexible.
Consumer spending on mobile apps hit $150 billion in 2024, up 13% year-over-year, according to Sensor Tower's State of Mobile report. But the composition of that spending is shifting fast. Non-gaming apps drove the bulk of growth, climbing 25% year-over-year. AI chatbot apps alone surged 200% to $1.1 billion in consumer spending, and by the end of 2025, ChatGPT's mobile app had crossed $3 billion in cumulative revenue in just 31 months.
If you are building a mobile app in 2026, your monetization strategy needs to account for these shifts. Here is what is actually working, what changed, and how to think through the decision for your app.
The Platform Fee Shakeup
Before diving into models, you need to understand the payment infrastructure, because it changed significantly in 2025.
Both Apple and Google require you to use their in-app purchase (IAP) systems for selling digital goods and services. Physical goods, ad revenue, and services fulfilled outside the app are exempt. The standard commission is 30%, but most new apps will never pay that rate.
Reduced rates for small developers. Apple's Small Business Program drops the commission to 15% for developers earning under $1 million in annual proceeds. Google offers an identical 15% reduced service fee on the first $1 million in revenue. If you are launching a new app, this is the rate you will actually pay.
Subscription-specific discounts. On Apple, auto-renewing subscriptions drop from 30% to 15% after a subscriber's first year, rewarding retention. On Google Play, all subscriptions are charged at 15% from day one, regardless of total revenue, making Android particularly favorable for subscription-based apps.
What a $10/month subscription actually nets you:
- Apple (Small Business Program): $8.50/month from day one
- Apple (standard rate, year one): $7.00/month, then $8.50 from year two
- Google Play: $8.50/month from day one, regardless of total revenue
The External Payment Option
The biggest shift in platform economics came in April 2025, when a U.S. court ruled that Apple could not charge commissions on purchases made outside the App Store. Apps on the U.S. storefront can now include a link to an external website for purchases with zero Apple commission. The previous 27% surcharge on external purchases was struck down as anticompetitive.
In practice, you can include a button that sends U.S. users to your own checkout page, where you pay only standard processing fees (typically 2.9% plus $0.30 through a service like Stripe). A $10 subscription that netted $7.00 through Apple now delivers roughly $9.40 through web checkout.
The tradeoffs are real. You take on responsibility for payment processing, sales tax compliance, fraud prevention, and refund handling. You lose Apple's frictionless two-tap purchase flow, and early data suggests an 8% to 12% drop-off when users are redirected to web checkout. This ruling applies only to the U.S. storefront, and Apple is appealing, so the landscape could shift again.
On Google's side, the Epic v. Google settlement proposed reducing standard fees to as low as 9% for non-gaming purchases, with Google Play Billing fees dropping to 5% on the first $1 million. These changes are being finalized and will extend through at least June 2032.
For most new apps, the practical approach is to start with native IAP at the 15% small business rate and add a web checkout path once you have the volume and infrastructure to justify the additional complexity.
Trend 1: Hybrid Monetization Is the New Default
The subscription-only model that dominated for years is losing ground. According to Adapty's analysis of top-grossing apps, over 60% now use hybrid monetization, combining subscriptions, in-app purchases, and advertising into a single revenue framework. In gaming, 43% of apps used a hybrid model in 2024, up from 36% the year before. Non-gaming apps are following their lead.
RevenueCat's State of Subscription Apps 2025 report, which analyzed 75,000+ apps representing $10 billion in revenue, identified hybrid monetization as one of the top growth levers. Their data shows that most non-gaming categories remain heavily reliant on subscriptions alone, while gaming apps have already proven that combining subscriptions with consumable purchases drives stronger revenue and retention.
Why the shift? Three forces are converging. Subscription fatigue is pushing users to resist adding another monthly charge. Rising user acquisition costs (especially post-ATT on iOS) demand a higher lifetime value to break even. And privacy changes have made pure ad models less profitable, forcing diversification.
A typical hybrid approach in 2026 layers a freemium core (basic functionality free, premium features gated) with an ad-supported free tier, a subscription for power users, and one-time or consumable purchases for users who want specific features without a recurring commitment. Tinder does this well, combining monthly Gold and Platinum plans with consumable Super Likes and one-time Boost credits. YouTube layers free with ads, a premium subscription, and in-app purchases through Super Chat.
Trend 2: Subscription Fatigue Is Reshaping Pricing
Subscriptions are not going away, but how they are structured is changing fast. 41% of consumers report experiencing subscription fatigue, and "not enough usage" is the top cancellation reason across all app categories, cited by 32% to 47% of churned users.
RevenueCat's data paints a stark picture of retention by plan type.
- Weekly subscriptions see 65% churn within 30 days.
- Monthly plans retain 43% at day 90.
- Annual plans hold nearly everyone for 12 months, but face a churn spike right at renewal.
The first month is brutal across the board, with nearly 30% of annual subscriptions canceled before they even reach month two. What is working in response:
Shorter trial windows with aggressive onboarding. Over 80% of trial starts now happen the same day a user installs the app, according to RevenueCat. If users do not start a trial on day one, they probably will not. The onboarding-to-paywall flow is the single most impactful point in the funnel.
Premium pricing over mid-tier. RevenueCat's data shows that the median subscription app prices at $29.99, with the upper quartile nearly three times higher. Higher-priced apps actually see better trial conversion rates (9.8% median for high-priced versus 4.3% for low-priced). The $5 to $10/month dead zone remains the first tier to get cut when users audit expenses.
Hard paywalls for the right categories. Hard paywall apps convert downloads to paid users at 12.1% median versus just 2.2% for freemium. Health and fitness, business, and education apps are seeing the strongest results with this approach.
Easy cancellation and pause options. Apps that make it painless to leave see higher re-subscription rates. Pause features grew 66% year-over-year in 2024, proving they reduce permanent churn.
Trend 3: AI Apps Are Rewriting the Monetization Playbook
AI-powered apps are not just a new category. They are establishing new benchmarks for what users will pay and how fast revenue can scale.
ChatGPT's mobile app earned an estimated $2.48 billion in 2025 alone, a 408% increase over 2024. It reached the $3 billion cumulative spending milestone in 31 months, faster than TikTok (58 months), Disney+ (42 months), or HBO Max (46 months). By December 2025, the app was generating roughly $338 million per month, more than it earned in its entire first year.
More broadly, generative AI apps doubled their in-app revenue in the first half of 2025, bringing in $1.87 billion compared to $932 million in the second half of 2024, according to Sensor Tower. Sixteen different AI apps reached at least $10 million in IAP revenue in 2024.
The monetization insight from RevenueCat's report is telling: AI apps do not convert users at a higher rate than other apps, but they generate more revenue per subscriber. Users are willing to pay more for AI-powered features when the value is clear. AI apps average $0.63+ per install after 60 days, double the overall median of $0.31.
For app builders, this means AI features can justify premium pricing, but simply wrapping a chatbot interface is not enough. The apps succeeding are those offering distinct utility: photo editing with AI-powered tools, fitness coaching with personalized plans, and productivity apps with intelligent document analysis. The differentiation is in the application, not the technology.
AI apps are also driving experimentation with credit-based and usage-based pricing models. Rather than a flat monthly subscription, some apps sell packs of AI credits that users consume on demand, creating a consumable IAP model that works alongside or instead of recurring subscriptions.
The Core Models: A Quick Reference
Whatever trends are reshaping the market, the underlying mechanics still matter. Here is a concise breakdown of each model and when it fits.
Subscriptions remain the dominant model for non-gaming apps delivering ongoing value: fitness, productivity, streaming, AI tools. Google Play's flat 15% rate on all subscriptions makes Android particularly favorable. Watch for the $5 to $10/month dead zone and plan your pricing above or below it.
In-app purchases come in two types that serve different purposes. Consumables (credits, tokens, boosts) drive repeat purchases and work well in apps where usage varies. A translation app might sell packs of 50 translations rather than charging monthly. Non-consumables (unlock pro features, remove ads) capture revenue from users who would never subscribe but will pay once for permanent access.
Advertising works for free apps with high engagement and large user bases. An app with 100,000 monthly active users can realistically generate $5,000 to $100,000+ in monthly ad revenue depending on category, geography, and format. Rewarded video ads consistently outperform other formats in both revenue and user satisfaction.
Paid downloads represent just 3% of apps globally. They can work for niche professional tools and premium games, but the bar for polish is high because users who pay upfront have zero tolerance for bugs.
Choosing the Right Approach
Your monetization model should follow from your product, your users, and your market. These questions will help narrow it down.
How often will users return? Daily use suits subscriptions or ads. Occasional use works better with one-time purchases or consumables.
What platform are you targeting first? iOS users spend more on in-app purchases. Android users show higher ad tolerance and benefit from Google's flat 15% subscription rate. If you are targeting the U.S. market, the external payment option gives you additional pricing flexibility on iOS.
What does your competitive landscape look like? If competitors are free, you will likely need a freemium approach. If you are solving a professional problem, users may expect to pay.
Can you layer multiple models? The data increasingly says you should. Even if subscriptions are your primary revenue stream, adding consumable purchases or a one-time "lifetime" option captures value from users who would otherwise contribute nothing.
Common Mistakes
Waiting too long to monetize. Users who have never paid become accustomed to free. Introducing monetization later triggers backlash. With 80% of trial starts happening on day one, your monetization needs to be part of onboarding, not an afterthought.
Ignoring platform fees in your pricing. Run your financial model at both the 15% small business rate and the 30% standard rate. If your app grows past $1 million, your margins change overnight. Factor in the external payment option for U.S. users if the math justifies the added complexity.
Not testing pricing. RevenueCat's data shows the upper quartile of apps charges nearly three times more than the median. If you have not experimented with price points in the last six to nine months, you are probably leaving money on the table.
Building subscription-only in 2026. The data from RevenueCat and others consistently show that hybrid models outperform single-model approaches. Even a simple addition, like offering a one-time "lifetime" purchase alongside your subscription, can capture meaningful incremental revenue.
Building With Monetization in Mind
The decisions you make early, which platforms to target, how payments flow, whether to support web-based signups, wand hether to offer consumable purchases alongside subscriptions, have downstream implications for your architecture, your user experience, and your unit economics.
We build mobile apps for clients across industries, and the monetization conversation is one we have in the first week, not the last. These are not afterthoughts; they are architectural decisions. If you are planning a mobile app and want a development partner who thinks about the business model alongside the code, we should talk. You can also explore our iOS and Android development services, or read more about what goes into pricing app development.
