App Cost Evolution: iPhone users pay average of 19 cents per app, Android users pay just 6 cents

Many consumer surveys point to an obvious conclusion: most people hate seeing ads on smartphones and tablets. But the truth is, contrary to the desire for an ad-free experience, when faced with the choice between free apps with ads, or paying even $.99 for apps without ads, consumers overwhelmingly choose the free apps and tolerate the ads.

In this post we explore that revealed preference for free content over content free of ads by examining four years worth of pricing information for the nearly 350,000 apps that use Flurry Analytics.

Our Apps Tell A Story

Each time we download an app, we reveal a little bit about ourselves. A glance at the apps on your phone can indicate whether you are a fan of sports, gaming, or public radio, and whether you love to hike or cook or travel. But our choices of apps also reveal our individual tolerance for advertising, and how we feel about the trade-off between paying for content directly, or paying indirectly by (implicitly) agreeing to view ads.

In many cases, apps are available in two forms: free (with ads) and paid (no ads). If you truly can’t stand to see ads in apps, you can usually pay $.99 or $1.99 to eliminate the ads and possibly get some additional functionality too. Even when a specific app does not come in paid and free versions, there are often other apps to choose from, free and paid, that perform very similar tasks like calling a taxi or looking up recipes.

So what are consumers choosing? Let’s start by considering iOS apps since they have been available for longer than Android apps. Note that all of our measurements in this post are weighted by user numbers so the apps with more users contribute more to the total trend.

People Want Content To Be Free

The chart below shows how the proportion of free versus paid apps has changed over the years in the App Store. Between 2010 and 2012 the percentage of apps using Flurry Analytics that were free varied between 80% and 84%, but by 2013, 90% of apps in use were free.

Chart 1 resized 600

Some might argue that this supports the idea that “content wants to be free”. We don’t see it quite that way. Instead, we simply see this as the outcome of consumer choice: people want free content more than they want to avoid ads or to have the absolute highest quality content possible. This is a collective choice that could have played out differently and could still in particular contexts (e.g., enterprise apps or highly specialized apps such as those tracking medical or financial information).

Android Users Are Even Less Willing to Pay For Apps

Up until now, we have focused on iOS apps because they have been around longer, but what about Android? Conventional wisdom (backed by a variety of non-Flurry surveys) is that Android users tend to be less affluent and less willing to pay for things than iOS users. Does the app pricing data support that theory? Resoundingly.

As of April 2013, the average price paid for Android apps (including those where the price was free) was significantly less than for iPhone and iPad apps as shown below. This suggests that Android owners want app content to be free even more than iOS device users, implying that Android users are more tolerant of in-app advertising to subsidize the cost of developing apps.

chart 2 resized 600

These results also support another belief derived from surveys and some transaction data: iPad users tend to be bigger spenders than owners of other devices, including iPhone. On average, the price of iPad apps in use in April of this year was more than 2.5 times that of iPhone apps and more than 8 times that of Android apps. This is likely to be at least partly attributable to the fact that on average iPad owners have higher incomes than owners of other devices.

Developers’ Pricing Decisions Were Data-Driven

On the surface, the rise of free apps could be seen as herding behavior: maybe app developers saw how much free competition there was and decided to make their apps free too. It’s certainly possible that may have happened in some instances, but by digging deeper into app pricing patterns over time, we were able to see that many developers took a much more thoughtful approach to pricing.

We looked at historical iOS app data (again because iOS apps have a longer history) to identify apps that have been the subjects of pricing experiments. That typically took the form of A/B testing, where an app was one price for a period of time then the price was raised or lowered for a period of time, then raised or lowered again. This lets developers assess users’ willingness to pay (i.e., price elasticity of demand) based on the number of downloads at different price points.

The chart below shows the percentage of tested and untested apps that were free (again, weighted by user numbers). The vast majority of untested apps in green were free all along, so it’s most interesting to look at the trend among apps that were subject to pricing experiments, in blue. As shown, there was an upward trend in the proportion of price-tested apps that went from paid to free. This implies that many of the developers who ran pricing experiments concluded that charging even $.99 significantly reduced demand for their apps.

PricingExperiments FA2

The People Have Spoken; It’s Time To Change The Conversation.

While consumers may not like in-app advertising, their behavior makes it clear that they are willing to accept it in exchange for free content, just as we have in radio, TV and online for decades. In light of that, it seems that the conversation about whether apps should have ads is largely over. Developers of some specialized apps may be able to monetize through paid downloads, and game apps sometimes generate significant revenue through in-app purchases, but since consumers are unwilling to pay for most apps, and most app developers need to make money somehow, it seems clear that ads in apps are a sure thing for the foreseeable future. Given that, we believe it’s time to shift the conversation away from whether there should be ads in apps at all, and instead determine how to make ads in apps as interesting and relevant as possible for consumers, and as efficient and effective as possible for advertisers and developers.

[Source: Flurry]

How Many Downloads Does it Take to Become a Top Rated App?

Earning a widely coveted spot on Apple’s top apps list or Apple’s featured app list is something that every iOS developer aspires to, as it can mean huge increases in app revenue.

Unfortunately, snagging one of those top spots is a daunting task, simply because it requires a huge number of daily downloads to make it onto the charts.

In fact, according to a new report from app tracking company Distimo, it requires approximately 38,400 daily downloads to make it onto the top 25 free apps chart and 3,530 downloads to make it onto the top 25 paid apps chart, though it requires slightly less downloads to make it onto the charts for an individual category.

Developers hoping to top the chart of more popular categories will need more downloads to make it into the genre’s top list, such as games, while less popular categories will require fewer downloads.

For example, to snag a top spot in Apple’s Entertainment category, a free app needs to have 6.7 thousand daily downloads, while a top spot in the Weather category requires just 300 downloads.

On average, across all categories, free apps will require 13 times as many downloads to make it onto the top 25 most popular free apps than it takes paid apps make it onto the top 25 most popular paid apps list, though this varies widely between categories.

Because games are by far the most popular apps in the App Store, Distimo did a break down of the category by game type to determine how many free and paid downloads it takes to make it onto the charts.

When it comes to free games, the arcade subcategory requires the most downloads to make it on the chart, at 8,400 downloads necessary per day. Action games were a close second, requiring 7,800 downloads, while puzzle games came in third, needing 5,800 downloads per day to score a spot on the charts. Music games and Trivia games were the least popular gaming categories, requiring only 600 downloads each to top the subcategory charts.

Paid games had similar ratios, with chart-topping arcade games needing at least 720 downloads per day, while action and puzzle games needed 850 and 490 downloads, respectively.

With those much desired top spots taking such a large number of daily downloads, it’s no surprise that many developers turned to unscrupulous tactics to earn themselves a place on the chart. Apple has cracked down on developers who artificially inflate their app ratings, which has had a significant effect on App Store rankings.

Back in December, a top spot on the overall top 25 app list required an average of 45,000 downloads, a number that, as you can see above, has dropped quite a bit, though it’s clear that some apps are still using shady tactics to get on the lists.

The real secret to scoring a legitimate spot on the top charts? Making a great game or app, and strategically using app sales to hold consumer interest. Apps like Camera+, Cut the Rope, Fruit Ninja, and Angry Birds have managed to hold the top spots on the paid app charts for weeks on end, and the same goes for the free charts, with ultra popular titles like Draw Something and Temple Run holding steady on the charts.

[Source: How Many Downloads Does it Take to Become a Top Rated App? | PadGadget]

Quante applicazioni ci vogliono per diventare Milionario?

Quante volte avete sognato di diventare degli sviluppatori di successo? Quante volte avete provato invidia a vedere un’applicazione come Angry BirdsTap Tapsemplicemente pensando ai grandi guadagni che i loro sviluppatori stavano realizzando? Se avete deciso di buttarvi anche voi in questa avventura, non solo per passione o divertimento, ma anche per diventare ricchi, anzi ricchissimi tanto da poter vivere solo di quello, sarà meglio che vi mettiate subito all’opera perchè a quanto pare bisogna vendere oltre 500 mila apps per raggiungere un guadagno a sei zeri.

Il calcolo è stato eseguito considerando un prezzo medio per applicazione di 2,45$ e che gli sviluppatori ricevono solo il 70% di ogni vendita. Sulla base di questi dati per guadagnare 1.000.000 bisogna vendere la bellezza di 581.395 applicazioni.

L’App Store rende più dell’Android Market

Se fossi uno sviluppatore per dispositivi mobili preparerei la mia applicazione sia per App Store che per Android Market sapendo, però, che le soddisfazioni migliori in termini economici mi proverrebbero dall’App Store. Secondo un’indagine di Mobclix, infatti, gli utenti del negozio di Apple spendono più soldi di quelli del negozio di Android.

L’indagine è stata condotta sulle applicazioni che per almeno 2 settimane sono rimaste nella top 10 della propria categoria, che hanno generato almeno 500.000 download ed usate almeno per 5 minuti 3 volte la settimana. Il tutto ha evidenziato che il settore delle utility è più remunerativo di quello dei giochi e intrattenimento, rispettivamente con 9,50 $, 4 $ e 6,70 $ di spesa media al mese.

Per Android, invece, l’utente spende ogni mese rispettivamente 6,70 $, 1,90 $ e 4 $.

AppStore_VS_Android

Il 25% delle applicazioni per dispositivi mobili vengono utilizzate una sola volta!

Un nuovo sondaggio di Localytics riporta che circa un quarto di tutte le applicazioni per i dispositivi mobile vengono utilizzate solamente una volta.

Nel sondaggio sono state prese in considerazione le piattaforme più diffuse attualmente: Android, iOS, BlackBerry e Windows Phone 7.

Dai dati riportati si evince che il 26% delle applicazioni vengono installate, utilizzate una sola volta e subito dopo rimosse o dimenticate.

Una buona parte delle applicazioni presenti nei vari Store, quindi, si rivela in realtà di poca o nulla utilità.