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I don't know how many of you distribute applications over Apple's iPhone AppStore, but many of you may be purchasers or, frankly, just interested in how the economics and application popularity work. You may wonder whether you should play at all if you were thinking of the AppStore as a distribution mechanism, but not solely focused on revenues. PinchMedia is a mobile application analytics firm that supplies code that is embedded into your application and allows them to aggregate anonymous usage data over time. This gives the application supplier essential data about reach and engagement with mobile applications. This kind of information can help you to test features, launch timing, pricing levels, demographic targets and more. The free slideshow below is a summary of what PinchMedia is seeing across the "few hundred" iPhone applications that they track today. If you are considering getting involved with the Apple AppStore, even just for free exposure and awareness building, this may be a presentation worth watching. Below the PinchMedia video, I share information from StromCode.com that seeks to provide further clarity regarding pipedreams of being a millionaire from AppStore sales. The net of all this is that for most apps, charging for your application (with or without ad sales) is likely to be more profitable than using simply an advertising model. Only a few applications sustain enough engagement with a rich enough target market to generate significant revenues. Finally, having an application that is unique and targets something that is "hot" and does it in a highly "sneezable" way (viral) certainly helps. Doesn't it always? This should not dishearten those who wish to use the AppStore simply as as a distribution mechanism. Even if you can't get in the Top 25 lists, you can harvest interest with links to your application's AppStore listing in other places that you "live", such as your website or in an email blast. From there, get your believers to promote it and build your movement.

I don't know how many of you distribute applications over Apple's iPhone AppStore, but many of you may be purchasers or, frankly, just interested in how the economics and application popularity work. You may wonder whether you should play at all if you were thinking of the AppStore as a distribution mechanism, but not solely focused on revenues. PinchMedia is a mobile application analytics firm that supplies code that is embedded into your application and allows them to aggregate anonymous usage data over time. This gives the application supplier essential data about reach and engagement with mobile applications. This kind of information can help you to test features, launch timing, pricing levels, demographic targets and more. The free slideshow below is a summary of what PinchMedia is seeing across the "few hundred" iPhone applications that they track today. If you are considering getting involved with the Apple AppStore, even just for free exposure and awareness building, this may be a presentation worth watching. Below the PinchMedia video, I share information from StromCode.com that seeks to provide further clarity regarding pipedreams of being a millionaire from AppStore sales. The net of all this is that for most apps, charging for your application (with or without ad sales) is likely to be more profitable than using simply an advertising model. Only a few applications sustain enough engagement with a rich enough target market to generate significant revenues. Finally, having an application that is unique and targets something that is "hot" and does it in a highly "sneezable" way (viral) certainly helps. Doesn't it always? This should not dishearten those who wish to use the AppStore simply as as a distribution mechanism. Even if you can't get in the Top 25 lists, you can harvest interest with links to your application's AppStore listing in other places that you "live", such as your website or in an email blast. From there, get your believers to promote it and build your movement.

PinchMedia Summary - focus: application profitability ad vs. paid app

  • Only <2.5% of apps are used after 100 days post purchase (sports does well short term, entertainment & lifestyle fare best long term).
  • Roughly 1% are long term audiences for usage.
  • Paid apps sustain engagement longer (I paid darn it, so I'm using it!).
  • Games engage most, while lifestyle, sports, entertainment and utilities lag.
  • <5% of apps are suitable for an ad revenue approach and it is hard to know pre-launch.
  • Sell your app, unless something "screams free" about it.

StromCode Summary - Who's making money on the AppStore really?

StromCode, in his article "The Incredible App Store Hype", makes an interesting case about AppStore sales myths and the benefits of diversity and the "huge amount of luck, patience, and hard work involved" in achieving success there.

  • Very few people/companies are making big money on the AppStore other than Apple.
  • Success for most is based on diversity and volume, but aggregate dollars are still relatively small.
  • Top 10 successes are most likely "hundred-thousandaires", not millionaires.
  • It can be a great way to complement other efforts and extend an audience.

Free Applications Strategies - 247Wallstreet.com, select volume success stories for free apps

24/7 Wall St.'s Garrett W. McIntyre highlights his choices of four successful strategies for free applications in the AppStore. They are as follows:

  • The Little Guy - Ad-based and released in bunches to maximize exposure. Software code that appears to be very similar across apps to minimize development costs. Quirky app names (“What Designer Brand Are You?” and “How Intelligent Are You?”). In other words, low cost, volume.
  • The Big Brand - Google, Bloomberg, ESPN, CNN use iPhone apps to extend their franchise to other contexts of their users' lives.
  • The Piggy-Backer - Barnes & Noble's eReader is used as an example of a competitive offer leveraging the interest in Amazon's Kindle hardware to build an audience.
  • The Natural - Game software makers port their already successful code to a new platform and provide free, limited level games as teasers for their full packages.

Philanthropy & Information-only Apps

Again, the first two information sources are focusing on the profitability of distributing apps via the AppStore. The third appears to focus on volume as a success metric. If you want to use the store to get a strategic philanthropic or information-only application out there to iPhone users, then your strategy should include the following things:

  • Your application must still be compelling and easy to use for at least a well-targeted audience.
  • Your promotion plan will probably not be able to depend on the AppStore dynamics themselves (Top 25 Paid or Free apps lists), so you will need to promote them through your other channels (mailings, press, website...).
  • You should probably charge a nominal fee (test several levels live, your customers are unlikely to be able to help you to predict this). Charge impulse-ready money such as $0.99. Engagement and longer term usage may improve based on the PinchMedia data, because they paid something.
  • You should aim for your app to be something that your users would be compelled to share with friends virally. Let them do work for you to spread the news.

Roughly 45 million iPhones/iPod Touch devices have been sold, so targeting it as a platform can make a lot of sense. Just keep your goals clear and execute wisely. ...and keep your eyes on Google's Android platform.