Wow, a great presentation that really quantifies how insane the appstore economy is. I think we might be bucking one or two trends mentioned in the deck, but for the most part we've had our share of success and failure with various app pricing strategies.
The question I struggle with is whether or not these consumer trends are created due to the AppStore's hit-driven structure, or simply the purchasing & usage habits of a VERY large demographic driving the economy on iTunes. ie: people ages 16-21. look @ the top music/movie charts.
Here's where we are winning. If you're going to do a free app (and you produce paid apps), do your own internal marketing and banner ad system. Don't pay someone else if you don't have significant volume. AdMob ROI is too low for most small shops with small budgets. With our ad system, we're saving a lot of money and it's responsible for roughly 25% of our premium app sales. Plus, we get a 5% commission through linkshare, so we take back profits from Apple's 30%. For the record, we're currently delivering ~2M ad impressions a month.
It doesn't take much to setup your own system. You can do it easily with a Webkit frame + Google AdManager or OpenX. We use AdManager, the interface is easier IMO and GOOG hosts everything (no costs).
"Usage time declines by almost a third in the first month after use, stabilizing at just under five minutes"
I would argue that the presentation is biased to those iPhone app developers who are casting a very wide net to people who download/buy apps to satisfy a short-term impulse (e.g. people who download or buy a (cheap) application and lose interest after a couple times.)
I believe there will always be room for quality in the AppStore. For me, quality means that I actually like using the app because it is useful. There are many learn Spanish apps that I bought - that I do not use. Because they weren't as good as I wanted them to be. I don't use them anymore but because I bought them I hate to delete them.
For example, Tweetie's integrated Summize search alone made it well worth the nominal initial cost and I still use it. I'm sure it's supporting the developer well.
I love iPhone Pano for easily taking panoramic photos up to 3581 x 586px (you used to have to manually stitch in Gimp/PS).
My point is quality niche apps will have a better long-term market. If your app only makes $150-$200/month - that's good - you can build a suite of apps. That's what I'm planning on doing once I get past the memory management/graphic design/etc. learning curve.
The presentation combines data from a lot of sources, including some of the quality applications you've mentioned. I didn't break out the retention characteristics by decile, but late in the presentation there's a slide on cumulative sessions over time by decile. As you can see from it, there's a small percentage of kick-ass applications people return to disproportionately.
I honestly can't tell you what's best for your business - a series of quick applications that many people will buy on impulse, use once or twice, and uninstall, or a quality application that's lovingly supported, sold at a higher price point, and gains additional users gradually through a growing reputation. Luckily, the AppStore supports both styles.
They say only the top 5% of apps are suitable for the free / advertising model, but I wonder about the apps using the freemium model. i.e. release a free version to get publicity, and charge for the better version. Data on that would be pretty interesting.
One take away from this for me is that users don't care about being monitored in their iPhone apps. This is a drastic departure from desktop world where any such thing would be either labeled "spyware" or heavily skewed by self-selection bias.
This is nice as it allows collecting actual usage stats and fold this into product design - a luxury not avaiable to desktop apps. This may be the best thing Apple has achieved with their rigid review process, knowingly or not.
Are these opt-in? I know that Visual Studio is opt-in.
Depending on your market, the most desirable customers might be the ones the most likely to turn it off (opt in or opt out). That can skew your data a great deal.
The law does not require disclosure of the collection of non personally identifying information. If it did, server logs would be illegal. Pinch analytics performs exactly the same function as Google analytics, and you don't agree to that on any of the websites you visit either.
so, it looks like from slide 9 it takes 20k downloads in a 24 hour window to get into the top 25, so lets say then maybe ~50k to get into the top 10.
I wonder if the returns from being on that list pretty much guaranteed to get you more than 50k downloads?
If so would it make sense to essentially buy your way into the top 10 (either with advertising or literally "we'll pay you 2 dollars to install this 1 dollar app in the next 24 hours") and then make money on your way down?
Well, keep in mind that those are the figures for free applications. The barrier for paid applications is a lot less - about a tenth.
I've seen application developers experiment with this approach, generally using in-application advertising, but the conversion rates aren't compelling - and if you fail to get ranked, then you've blown a lot of money. I'd only try it in conjunction with a lot of simultaneous free press, working whatever opt-in e-mail list you've built up for your app business, etc. And I'd stop for a bit when you get onto the top 100 and let the natural benefits of just being on that list carry your application higher.
The question I struggle with is whether or not these consumer trends are created due to the AppStore's hit-driven structure, or simply the purchasing & usage habits of a VERY large demographic driving the economy on iTunes. ie: people ages 16-21. look @ the top music/movie charts.
Here's where we are winning. If you're going to do a free app (and you produce paid apps), do your own internal marketing and banner ad system. Don't pay someone else if you don't have significant volume. AdMob ROI is too low for most small shops with small budgets. With our ad system, we're saving a lot of money and it's responsible for roughly 25% of our premium app sales. Plus, we get a 5% commission through linkshare, so we take back profits from Apple's 30%. For the record, we're currently delivering ~2M ad impressions a month.
It doesn't take much to setup your own system. You can do it easily with a Webkit frame + Google AdManager or OpenX. We use AdManager, the interface is easier IMO and GOOG hosts everything (no costs).