There may be more than 20,000 iPhone apps out there that have been downloaded more than 500 million times, but what is the average shelf life of each app? Greg Yardley, CEO of Pinch Media, offers some stats based on the 30 million+ downloads his iPhone app analytics startup has kept tabs on. One of the most telling slides in a recent presentation he gave shows the drop-off rate in iPhone app usage (see above; entire slide presentation embedded below). For free applications, only about 20 percent of users return to use the app the first day after they download it, and then it quickly drops off from there. By 30 days out, less than 5 percent are using the app. The chart for paid apps shows a slightly steeper fall-off rate. So there is a very brief window of time to capture people’s attention and potential revenues.
The key insight of the presentation is derived from this data. Because it answers the eternal question that all iPhone developers have: Should my app be free or should I charge for it? For all but the most successful apps, the free route does not make much sense because ther eis not enough time to recoup the costs of developing the app from advertising.
Mobile game ad network Greystripe has hit 140 million ad-supported game downloads thanks to iPhone users. In the fourth quarter of 2008 alone, it supported 30 million downloads. All of these ad-supported and Greystripe says that over 50 percent of ad impressions are from iPhone games. The ads themselves have game-like characteristics designed to increase teh chances of consumers clicking on them and playing with them, hence “advergames.”
Last summer, TechCrunch reported that Greystripe turned its attention to the iPhone, and is subsequently seeing an increase in downloads and ad impressions. In fact, Greystripe’s Top 10 Total Games (by ad impression) are all iPhone games. In December, the company created its own version of Adobe Flash for the iPhone, which Apple currently prohibits on the iPhone, that would allow advertisers to use rich media flash ads. The company is making the iPhone market a “priority for the foreseeable future,” finding that the device is a much more successful ad platform for gaming than Java devices.
Omniture is extending its SiteCatalyst measurement tool to native iPhone applications, enabling developers and marketers to gain insight on how users are interacting with their iPhone apps, based on real-time information. This should allow them not only to improve the user experience based on analytics, but also make adjustement necessary to generate more revenue by enhancing ad clicks, purchasing and increasing page views.
The new offer, which is basically an extension of its existing SiteCatalyst solution, is called App Measurement for iPhone and will be generally available as from January 2009. To our knowledge this is the first analytics program specifically designed for native iPhone applications, but it’s safe to say other providers will soon follow suit with similar offerings.
When the iPhone App Store launched last Friday along with the new 3G iPhone, free apps made up 24 percent of the 552 apps available. In other words, the most popular price point was free. The rest of the apps ranged in price from 99 cents to $9.99 and even more. Instead of dictating a uniform price, as he did with music, Steve Jobs let the market decide what price apps should go for.
The market is already doing that sorting. According to Greg Yardley at Pinch Media, as of this morning there were 798 iPhone apps available through the App Store on iTunes, and only 20 percent (161 apps) are free. The most popular price point is now 99 cents, with 24 percent (188 apps). The second most popular is $9.99 with 12 percent (96 apps, including Enigmo, an addictive puzzle game, and the handy GuitarToolkit). See the price distribution chart above.
All the other price points are shifting to either 99 cents or $9.99, implying that the sweet spot is 99 cents for most apps just as it is for songs. But with the caveat that if your app is good enough people will be price insensitive. Below is the price distribution of iPhone apps the day of launch, for comparison purposes.
A small and very new startup out of New York called Pinch Media is building tools for iPhone and iPod touch developers.
The first of these tools is an analytics offering called Pinch Analytics, released just today for free, that will track an application’s number of unique visitors and active users, as well as how much time those users spend on the app and where they are located geographically. Fred Wilson is calling it the “FeedBurner for iPhone apps”.
Pinch Media is debuting with some formidable backing. Both First Round Capital and Union Square Ventures have provided an undisclosed amount of seed money in conjunction with several angels. Chris Fralic, a partner at First Round, says the firm is a big believer in “the power of the iPhone platform and how it’s driving usage beyond its market share and functionality beyond the desktop.”
Expect Pinch Media to roll out additional tools for promoting and monetizing apps built on the iPhone SDK. The startup’s already signing up advertisers for its platform.
Founders include Jesse Rohland and Greg Yardley, who left Yahoo in March.
