How can I make money from Android applications?

As Paul Kafasis, CEO of Rogue Amoeba, aptly puts it, “The App Store is very much like the lottery, and very few companies are topping the charts. It’s a hit-based business. Much like music or book sales, there are a few huge winners, a bigger handful of minor successes, and a whole lot of failures.”

But hey, there’s not too much to worry if you go the right way about it. Here’s what you need to do: build a free app for a start. It may sound counterintuitive, but free apps trump paid ones any day.

Some of the most common ways have been listed below. 

In-App Purchases (IAPs)

In-app purchases allow users to unlock features or purchase more of something, maybe coins in a game or stickers in an instant messaging app. While building an app, you can decide whether you want the IAPs to be a one-time event (where users unlock additional features), or an ongoing process (where users purchase goodies or coins, as within a game). This form of the revenue system is fairly rewarding, but you need to have a spectacular app to justify those purchases to your users.

In-App Advertisements

Mobile ad networks, such as AdMob or even Google's own ad-serving service, offer easy integration with apps: just install the ad network framework, and let it rip. The good news is, mobile advertising is predicted to grow to $17 billion by 2018. So, jump into the game today!

Though, advertising pays differently for Cost-Per-Click (CPC) and Cost-Per-Thousand Impressions (CPM). They also depend on users’ countries of origin (even time of access to some extent) and the format used in the ads (videos fare better than static ads).

Some common ad format types:

• Interstitial ads: Full screen pop-ups
• Banner ads: Sits either at the top or bottom of the screen inside an app
• Video ads: Automatically played or on-demand
• Native ads: Merge seamlessly into apps

Typically, a developer stands to gain US $10 to $100 for 1,000 views.

Take some cues from the study done on monetization based on the screen pixels taken up by advertisements.

CPI Affiliate Income Networks (Cost Per Install)

You basically pay a fixed amount to the publisher of your app for every install that you get. These publishers place digital ads of your app across a range of platforms in an effort to boost installation rates. The charges that you need to pay to a publisher (or a CPI company) typically range from US $0.80 to $3.00 per install. For instance, you may need to pay US $3 for every install made and get paid US $1 for making that install happen.

These numbers don’t look all that bad too, at least you are guaranteed a constant trickle of revenue.

Subscriptions

This model is mostly adopted by newspaper and magazine apps. They are initially free to download, but involve subscriptions once you finish reading your weekly quota of articles. The users are prompted to pay a monthly subscription to unlock rest of the contents.

Sponsorships

Landing a great a deal with sponsors is a great way to make good money, besides, it helps add great branding value to your project.

And if nothing works, there’s always a mini pot of cash handy: your friends and family.

The Build

You need the perfect coding skills to live up to your audience’s expectations, which can be safely assumed, was not taught that well to you in your schools.

The alternative, an increasingly popular route, is to learn them outside. A growing range of online and real-world code academies can teach you what it takes to build a great app.

Answered by Priya Phadtare on quora.com