Ads pay for your free iPhone apps

An article on CNN Money today highlights how mobile devices, with the iPhone leadng the way, have caught the attention of advertisers. According to this article, the mobile ad market is expected to grow to $12 billion by 2013, up from an estimated $1.72 billion for 2008.

It’s interesting to see how the iPhone changed forever the way we’re getting apps. Before the iPhone, you most likely had to pay for an app that you would have downloaded from your carrier. Now, many apps are made available for free, but follow the ad-subsidized models.

What does that mean for app developers? The app subsidized business model help them grow at a much faster rate than if their app were paid-for apps. The article takes the example of Loopt, who says people are downloading its iPhone application at a faster rate than they have for any other device.

“Consumers are drunk on free from the Internet,” says Peter Farago, vice president of marketing at Flurry, a startup that has developed an analytics tool that lets mobile developers track how people use their applications. Farago believes that paid-for mobile services will initially give way to ad-subsidized applications.

Whether you like it or not, you may want to get used to it as it seems it’s going to me more than a trend from now on. Question for you: would you rather have a free app with ads or pay a few bucks and have an application with no advertising?