Want to be a top grossing iOS app — you need to earn about $5M a month now

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By Kathleen De Vere Comments

Having an app on the top grossing iOS app charts is more lucrative than ever — according to new figures revealed by TinyCo, an app that has maintained a rank between No. 5 and No. 15 on the top grossing iOS app chart has more than doubled its earnings year-over-year.

According to figures released the San Francisco-based mobile developer in a recent blog post, an app’s revenue had to increase by 85 percent between Q1 and Q3 2011 in order to maintain a chart position between No. 5 and No. 15 on the top grossing app charts. By Q1 2012, that app would have to earn a further 48 percent more than it was earning in Q3 2011 just to stay in the same position.

Although TinyCo doesn’t reveal exact earnings figures, we can estimate how much a top grossing app is earning today based on their information. Last summer, we had heard from several sources that a top grossing app was earning about $2 to $3 million a month on iOS. This means by Q3 the same app was earning about $3.5 million a month in order to keep up with the 85 percent increase reported by TinyCo. By the first quarter of this year, a top grossing app’s earnings were likely over $5 million a month as the rate of revenue growth on iOS increased by a further 43 percent.

While these numbers are more than double what we’ve heard before, they’re within the realm of possibility. In December, Epic’s Infinity Blade II earned $5 million in its first month of release. In May, GREE revealed the newly acquired Funzio was earning more than $5 million a month from its suite of social and mobile games, and the highest average chart position those games held on the top grossing iOS app charts was No. 20.

Considering the amount of new iPhones and iPads activated during the year and the increased competition in the iOS app store, it’s not unreasonable to conclude apps are earning more now. TinyCo also credits the shift towards the free-to-play monetization model with the rise in app revenues, restating the widely-accepted fact that free apps drive higher average revenue per paying user and produce users with a higher lifetime value.

Update: TinyCo has reached out to us to clarify that its figures were based on the daily, not the monthly revenue figures for top grossing iOS apps. According to TinyCo, revenues based on daily chart rankings have increased increased in line with the percentages outlined in their original blog post. They estimate an app holding a rank between No. 5 and No. 15 on the top grossing app chart in Q1 2012 was earning as much as $80,000 per day. However, the company also pointed out an app’s chart position and revenues can ebb and flow based on seasonality, competition and many other factors outlined in their original blog post.