Apple App Store Synthesis - Q3 '09

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    Apple App Store Synthesis - Q3 '09 - Presentation Transcript

    1. App Store synthesis Q3 ‘09 MARKET SIZING, PRICING EFFECTS, & USER TRENDS source: taptaptap blog Ken
Yarmosh Product
Strategist www.technosight.com www.twitter.com/kenyarmosh
    2. MOTIVATION There’s been great information shared about Apple’s App Store on market sizing, developer PRICING EFFECTS, and insight into USER TRENDS. It’s hard to sort and navigate all of it, keep track of key insights and changing trends, and overall, have a quick, synthesized reference available for iPhone developers. www.TECHNOSIGHT.com
    3. MARKET SIZING [A(d ) ( u ) ] x p = Revenue Potential (upper bound) ‣ A = # of total devices (source: Apple) • if applicable, break out iPhone versus iPod Touch ‣ d = % of devices in a given addressable market (source: industry) • may require multiple calculations using different sources ‣ u = % of users downloading apps (source: industry) • if applicable, break out paid versus free ‣ p = price per unit (your variable) Jonathan Wegener’s “The Definitive Guide to iPhone App Market Sizing www.TECHNOSIGHT.com
    4. GETTING TO THE TOP “Here’s what Barnard says are the average prices for Apps in the App Store: Top 10 = $1.99 Top 50 = $2.23 Top 100 = $3.18 According to Barnard, it takes about 400 sales per day to break into the top 100; and about 10,000 sales per day to hit the very top of the charts. Assume the average sales in the top 100 to be about 1,000 per day. If the average price for an app in the top 100 is $3.18, that’s about $116 million per year for the top 100 apps.” http://www.appcubby.com/blog/files/app_store_pricing.html http://www.cultofmac.com/developers-call-bs-on-2-4b-iphone-app-store-number/15250 www.TECHNOSIGHT.com
    5. PRICING - CAUSE + EFFECT Free equals the most downloads (duh).* BUT lower or the lowest prices often result in more negative reviews and lower ratings, “Also during this experiment I saw WriteRoom.iPhone’s star ratings (especially when I was giving it away for free) go from mostly 4’s and 5’s to evenly distributed between 5 and 1 star. My conclusions are: 1. Cheaper gets you more users. 2. But cheaper also makes the average user less satisfied.” source: Pinch Media’s AppStore Secrets http://blog.hogbaysoftware.com/post/170655672/writeroom-iphone-4-99-daily-sales-compared-to * I’ve had many discussions with iPhone developers. Making a decent app free typically results in upwards of 1000’s of downloads per day. Comparatively, even $0.99 can drop it to zero or < 20 per day. www.TECHNOSIGHT.com
    6. MORE THOUGHTS ON PRICING Get out of the $0.99 mindset -- http://www.technosight.com/how-to-build-a-non-0-99-iphone-app/ “How to be Unique” Case Study -- http://www.technosight.com/ramp-champ-combining-iphone-play-with-in-app-purchases-and-virtual-goods/ www.TECHNOSIGHT.com
    7. USER TRENDS - DISCOVERY “Over 90% of users who cite these activities [browsing the App Store rankings or searching for a specific app] do them on their mobile device instead of their computer. ” source: AdMob July ’09 Report www.TECHNOSIGHT.com
    8. USER TRENDS - USAGE Engagement can be driven by: ‣ Developing applications with long-term value (e.g., focus on business, utilities, and productivity categories). ‣ Releasing regular updates. For games, this can include new levels. For other apps, this will include highest requested features or market differentiators. source: Pinch Media’s AppStore Secrets ‣ Coupling apps with desktop or web-based counterparts. www.TECHNOSIGHT.com
    9. THERE’S MORE... This has been a quick synthesis of available information about Apple’s App Store on market sizing, developer PRICING EFFECTS, and insight into USER TRENDS. Need help developing your iPhone or other mobile app? Ken
Yarmosh Product
Strategist www.twitter.com/kenyarmosh www.technosight.com www.TECHNOSIGHT.com

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