In-app purchases will become the dominant smartphone revenue model by 2015, according to a new report by market research firm IHS Screen Digest.
The report claims that in-app purchasing's revenue share will rise from 39 per cent in 2011 to 64 per cent - around $5.6 billion (£3.6 million) - in 2015.
Senior analyst of mobile media Jack Kent said: "Smartphone users overwhelmingly prefer free apps to paid apps, as we estimate 96 per cent of all smartphone apps were downloaded for free in 2011.
"In 2012, it will become increasingly difficult for app stores and developers to justify charging an upfront fee for their products when faced with competition from a plethora of free content.
"Instead, the app industry must fully embrace the freemium model and monetise content through in-app purchases."
Screen Digest's findings show just how quickly the mobile market is changing, and growing: a similar study in November 2010 predicted in-app purchases would bring in a modest $1 billion by 2015.
A report in September from fellow market research firm Distimo claimed in-app purchases brought in 72 per cent of revenue on the Apple App Store, and little wonder: mobile analytics firm Flurry claimed last July that the average in-app purchase was worth $14.
Source: IHS Screen Digest