Mobile App Monetization has been the holy grail for most app developers so far. Until last year, the monetization strategy involved selling apps in the app store or providing free apps and generating revenue through advertisements in the app. Things are beginning to change this year, according to a recent survey of developers conducted by Appcelerator & IDC.

Given the sheer size of the iOS and Android market places, that comes with the app discovery and usage issues, and the size of the user bases for both these platforms, developers are shifting their strategies from acquiring new users to keeping their existing users happy. As you can see from the graph above, the app store sales model is seeing a significant decline this year while advertising is almost flat. Some new monetization strategies are starting to emerge or gain traction.

In-app purchases seem to be the foremost of the new strategies for most developers and is on par with the app store sales. Subscription based models are also being considered but I foresee that they might not become as big. Unfortunately, the subscription model has got a bad rap with the struggles of the newspaper and magazine publishing industry. Also, the users have become used to buying only what they want or need, even if in the long run they end up spending more than a subscription service.

Mobile commerce will have its coming out party this year. By all accounts, it is appearing that this holiday season could be the biggest so far in terms of mobile commerce sales. eBay has upped their 2011 mobile sales forecast by 25% to $5 Billion after they reported 32% growth in Q3 YoY. We will see that trend with other retailers as well.

Brand Loyalty and coupons are other alternatives that have growing mind-share amongst developers but I don’t see them as a stand-alone monetization strategies. Rather, developers will combine these strategies to extend the user loyalty while implementing other strategies to acquire new users.

Finally, there is an emerging NFC based strategy which could be the future. However, it is early days given that there is only 1 NFC-capable device in the market as of this writing. As more NFC capable devices become available in 2012 and beyond, we will see further refinements of the monetization strategies that leverage NFC become prevalent.

Note: This article is part of series of articles on the Mobile App Development. You can read other articles in this series here.