So how can app developers make money in such a competitive market?
First lets take a look at some of the monetization methods identified in Priori’s iOS and Android Global Insights Report (2013).
Table 1: Monetization Methods of Education Apps
| Ed. Apps Downloaded in 1 Month | Free | Free w/ in-app purchases | Paid | Paid w/ in-app purchases | |
| iOS Apps | 12 821 | 53% | 17% | 28% | 2% |
| Android Apps | 19 557 | 82% | 9% | 8% | 0% |
Table 2: Cost and Revenue of Paid Educational App
| Min. Cost | Max. Cost | Median Cost | Average Cost | Monthly Revenue | |
| iOS Apps | $0.84 | $299.99 | $2.51 | $4.54 | $16 256 908 |
| Android Apps | $0.68 | $202.67 | $2.31 | $3.89 | $1 063 843 |
What’s fascinating about these statistics is that although iOS had significantly fewer educational app downloads, its prices were significantly higher and generated over 15X more revenue than Android apps in Google Play. Also, since 2013, the freemium model for educational apps has expanded, with five of Google Play’s top ten educational apps now offering in-app purchases from $0.99 and $119.99.
In their book Mobile Learning – A Handbook for Developers, Educators and Learners, McQuiggan et al. (2015) describe common revenue models adopted by educational app developers.
- Due to a lack of funds and accessibility concerns, many educators will only consider free apps.
- In-app advertising is often frowned upon, particularly in apps targeting young children. They are also intrusive in an educational app where users are trying to perform important functions and they consume a portion of limited screen space (Munir, 2014).
- Consumers have grown wary of the word “free”. Many “free” apps are actually using the freemium model (pay to unlock certain features) or the in-app purchasing model (selling physical or virtual goods). “Free” may also suggest lower quality.
- The freemium and in-app purchasing models are increasingly popular with apps charging for additional services and tools, certification, tutoring/help, unlocking more content, syncing etc. Some argue that this model exploits users and makes apps inaccessible to schools while others argue that it is an effective means of attracting new customers.
- Premium one-time fee models may be more manageable in educational settings as opposed to in-app purchases. Consumers expect a simple app to be $0.99, and more robust apps to be between $2.99 – $4.99. They are willing to pay more for utility and special education apps that can replace other assistive technologies.
- Developers may offer volume purchasing and educational discounts.
- Apps may be bundled to increase their adoption and promotions may stimulate downloads and help to establish a user base.
Andrew Cohen (2013), Founder and CEO of Brainscape, provides the following tips for deciding on a revenue model for an educational app.
Table 3: Choosing a Revenue Model for Your Educational App
| Description | Revenue Model |
| App offers a predictable utility (e.g. graphing calculator, carpenter’s level, well-branded test prep app) | Paid |
| App has and retains a huge use base. App is addictive. | In-app advertising |
| App presents user with a moment of massive pain or desire (as in gaming) | In-app purchases |
| App is providing constant new content or a file storage service | Subscription |
Munir (2014) recommends approaching mobile with a “dual mindset of building an awesome app and an eventual business”. A monetization strategy should be chosen during the development phase and built into app design. This model can evolve over time as consumer data and feedback is collected and the market evolves.
Next: Forecast for Investors
Opportunities for Educational Apps 
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