Last month we looked at the breakdown between free and paid apps at the end of the first half of 2015. This time we wanted to dig further into the data and see how the numbers have changed since 2014.
First off, It’s clear that free apps are doing great. They make up a higher proportion of all apps and of the new apps that come out every month. But, when we analyzed this number of new free and paid apps a bit deeper, we were in for a surprise.
Between March and June 2014, there was a dramatic decline in monthly new paid apps but only a slight decline in monthly new free apps. The graph below shows the number of new free and paid apps across all genres that were added to the iOS appstore each month. On average, about 38,000 new free apps and 8,000 new paid apps were added per month. But, the number of new free apps decreased at a rate of about 900 apps per month while the number of new paid apps decreased at a rate of about 2,900 apps per month, making the rate of the new paid app decline more than 3x the rate of the new free app decline.
For the same period in 2015, there seems to have been a complete reversal: the decline in new paid apps slowed, whereas the decline in new free apps became more aggressive. The graph below shows that about 52,000 free apps and 7,000 paid apps were added on a monthly basis. But as opposed to 2014, the number of new free apps decreased at a rate of about 3,300 apps per month and the number of monthly new paid apps decreased at a rate of about 1,000 apps per month, making the rate of the new paid app decline less than 1/3 the rate of the new free app decline.
Though this analysis only takes into account what happened in a four-month period during the first half of 2014 and 2015, we can see that the aggressive decline in new paid iOS apps of last year leveled earlier this year while the decline in new free apps is now significantly stronger than it was in 2014. Does this mean that the trend of abandoning the paid app model in favor of free and freemium apps is slowing down? It sure looks like it, but to be certain we will need to continue investigating throughout 2015! Stay tuned for more!
In our quest to better understand App Store dynamics, especially when it pertains to paid apps vs free apps, we decided to analyze how much app turnover there was in Apple’s iPhone and iPad Top 400 lists (now Top 200 lists). We looked at how many apps entered (and thus exited) the Top 400 Free, Paid and Grossing lists (by category) throughout the month of May 2014. These entries/exits are important because, as they increase, they provide an indication of which business model (i.e. paid or free) or genre/category offers the best opportunity for discovery.
The two graphs below show, for May 2014, the number of iPhone and iPad apps that entered the Top 400 Free, Paid and Grossing ranks but that had not been ranked the previous day. For both iPhone and iPad apps, generally more than three quarters of Top 400 Paid and Top 400 Grossing apps remained ranked from one day to the next. For iPhone apps, the daily turnover in the Top 400 Paid list and in the Top 400 Grossing list (for both paid and free apps) was more than double that of the Top 400 Free list. For iPad apps it was nearly double, with free apps having an average of 51 new entrants a day in the Top 400 Free compared to an average of 35 new entrants a day for iPhone apps, a 46% difference.
Does this mean that a Paid app has a better chance of getting ranked and potentially getting discovered? About 1 out of every 8 apps is a paid app and therefore it is clearly easier for a paid app to get ranked. But the fact that there is more active turnover in the Top 400 for paid apps (and for paid or free Top Grossing apps) makes the competition for Top Paid and Grossing ranks far more open than for Top Free ranks.
We still believe that #PaidAppsRule
Our focus on app pricing optimization and the power of price changes (see post) has led us to make an interesting discovery related to the mechanism for making price changes on iTunes: the time between a price change request and it taking effect can vary dramatically.
Using our platform to initiate price changes on iTunes, we have seen them take anywhere between 15 minutes and more than 16 hours to go around the globe and be reflected in every storefront. Price changes literally go around the world starting in Australasian and Asian storefronts, then going to the European and African storefronts, before finishing in the Americas.
In the graph below we look at the time it takes for a price change on one of our apps to take effect in the New Zealand storefront (one of the first), the France storefront and the US storefront (one of the last). In the first price change at around 14:00 (or 2PM) on the 23rd of April the app had the Tier 1 price ( corresponding to $1.99) reflected in all three storefronts within 30 minutes. This was also true for the last price change at around 6:00 on the 25th of April. But on the 23rd (and again on the 24th), the app became free at around 10:00 in New Zealand, at around 23:00 (11PM) or 13 hours later in France and at around 3:00 on the 24th in the US. It therefore took 17 hours for that price change to be reflected in all storefronts on iTunes.
So if you are making a price change on your app and expect your new price to be reflected in all iTunes storefronts immediately (within 15-30 minutes), that will not always be true. This also means that if a competitor changes their price and you are in France or the United States, for example, watching the New Zealand or Australia storefront will be the best way for you to know in advance what new price is coming to your storefront.
As we continue testing and tracking price changes on more and more apps, we will be able to provide greater insight as to when (what part of the day or what day of the week) a price change has the most chance of spreading quickly (<1hr) or very slowly (>10hrs).
We have been aggregating publicly available information daily for each app in iOS’s USA storefront and use our own algorithms to estimate an app’s downloads. These can be seen on any app page (search for any iOS app at theloadown.com). Today we are releasing our estimated downloads data for 3 other storefronts: UK, Japan and France.
Based on our comparative analysis with real download data, we have good directional and trend estimated download data for both paid and free apps. With regards to total estimated downloads we have been getting relatively good values on paid apps, but could still be quite a bit off for many free apps.
Please remember that these estimates are for informational purposes only.
According to new market data we released, 21% of all apps currently in Apple iTunes are priced at $0.99 while 58% are free to download. We also found that in April 2013, iOS apps in Education, Entertainment, Games, Lifestyle, and Utilities genres represented nearly 57% of new apps launched.
Our US market update highlights the variation in price distribution among the 23 primary thematic categories in iOS (See Graph 1: iOS Mobile App Pricing by Genre as of April 2013).
Most categories have a majority of free apps with some having very little paid apps, such as Newsstand with only 3% paid apps. There are notable exceptions to this bias including:
- Book genre with 73% paid apps and an average price of $3.53
- Reference genre with 58% paid apps and an average price of $2.65
- Education genre with 58% paid apps and an average price of $2.44
- Games genre with 34% of apps priced at $0.99, 51% paid apps and an average price of $1.08
Another finding from our market data highlights the continued vibrancy of the iOS mobile app marketplace. In April 2013, Games led all genres with over 16k new apps (See Graph 2: New iOS Mobile Apps Launched by Genre in April 2013). This represents nearly 22% of all new apps launched last month.