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									iTunes App Store: Lessons from the first 30 months
                                 TOC: February 2011


                                         Ben Lorica
                              twitter.com/BIGDATA
                               twitter.com/DLIMAN
 Data for this talk:
 U.S. iTunes store
(Jul/2008 - present)
ALL-TIME Rankings - Downloads through mid Jan/2011

       # of Apps on All-time Rankings

PAID                                       !&)&$"*(!!
               !'($%('!!
                                          +,-./0!
                                          +,12!
                           !")#$')&!!
FREE
          !"#$%&&!!
ALL-TIME Top PAID Apps - Share of GAMES

                   iPhone             iPad

Top 100            53%                36%


Top 1,000          52%                35%


Top 10,000         38%                26%
                  Challenge:

           “App discovery”
                   in light of
          “Sturgeon’s Law”
<“Just like the Internet: high-volume of low quality stuff.”>
App Discovery Tools
User-Interface
 - Taxonomy
 - Lists: top-sellers, curated

Software tools
 - Search
 - Recommendation Engine

Third-party tools ; startups
 - Lists, reviews, social
  List of “Hits”
      on the
iTunes App Store
Top Charts - Jun/2010 to present

                     DEVICE        iTunes
Top Paid
                                   Top 200
                     Top 50
                                    Overall
                      Overall
                                    Category
Top Free

Top                                Top 200
Grossing                            Overall
                                    Category
     “Velocity of Hits”

         # of Days

Initial app          Debut on
store                Top 200
appearance           List
Days until debut: Overall Top 200 Charts
 MEDIAN Age in Days on Top 200 Debut
      '()!)1/2!                 !&!!
                                                         iPad
 '()!-+(../0-!                     !%!!
                                                         iPhone
      '()!*+,,!          !#!!

      '()!)1/2!           !$!!                Top 200 lists since June/2010,
                                              and apps that launched after
                                              the launch of the iPad.

 '()!-+(../0-!           !#!!

      '()!*+,,!                           !"#!!
   Duration on Top 200

Long-term Hit =>30 or more
    days on Top 200 List
Duration - What share of ‘hits’ last a month or longer?
            Share of Top 200 apps that spent
            at least 30 days on Top Chart
'()$%**$                                              %!#$
  3405$                                                 %&#$


'()$%**$                                                    %&#$
.,(//012$                                                   %&#$                     iPad
                                                                                     iPhone
'()$%**$                               !&#$
  +,--$                                  !"#$
              Apps that have appeared, in the main Top 200 charts, since Jun/2010.
MEDIAN Duration: Top 200 Paid iPhone & iPad Apps

 3.4!%55!144,!         "!

        012*,!           $%!                               iPad

        -../,!    (!

         )*+,!                                      &'!

 3.4!%55!144,!         !"!!

        012*,!           !$%!!                             iPhone
        -../,!      !#!!         MEDIAN Unique Days in
                                 Category Top 200 Paid
                                 iPad & iPhone Apps List

         )*+,!         !"!!      (since June/2010)
       For Paid apps:

       Effectiveness of
simple “Pricing” experiments
iTunes Pricing:

  Overview
Quick Visual Comparison of Large iTunes Categories



Average                   Median

Variation               “Middle 50%”
                              25th percentile
                                to
                              75th percentile
Middle 50% , Median, and the Interquartile Range




                  MEDIAN
       25th                            75th
     percentile                      percentile

                   Variation
             (Interquartile Range)
iPhone: ALL-TIME Top 500 Paid apps in each category
Games        => Median $0.99 ; Middle 50 = [$0.99 to $2.99]
Reference    => Median $1.99 ; Middle 50 = [$0.99 to $4.99]




                                      Price of
                                      All-time Top 500
                                      Paid iPhone Apps
                                      in each category
iPad: ALL-TIME Top 500 Paid apps in each category
Games         => Median $1.99 ; Middle 50 = [$0.99 to $3.99]
Reference     => Median $2.99 ; Middle 50 = [$1.99 to $9.99]




                                       Price of
                                       All-time Top 500
                                       Paid iPad Apps
                                       in each category
       Revised Experiment
Rank

 200


 100



       $2               $4
            Price ($)
Analysis of Top 200 iPhone
 apps that cut their prices
In some categories:

A price decrease, leads to a
rank decrease
 ... on day of price change
But, the effect of a price
cut disappears within days.
 Curated Lists
    remain
very influential
Lists of Featured Apps - Jun/2010 to present


                     DEVICE               iTunes

New &
Noteworthy           Overall              Overall
                                             &
                                          in Category
What’s Hot

Staff
                                          Overall
Favorites
App Discovery and Featured Apps

May/2010 survey of 96 developers

“Being featured by Apple is the
 greatest contributor to spiking
 sales.”

“ New and Noteworthy produced
 slightly less gains than Staff
 Favorites or What’s Hot ”.
          Revised Experiment
Rank

 500



 100


       BEFORE   App gets   AFTER
                Featured
Featured Apps and Rank - Sep/2009 to May/2010

         Degree outperformed “Expected” Rank
                                    +60%
       3224,'

    %/0*#12)'

%)!%"!#-).%)!'

        )%+,'                        )%+'5')2!%+2"!67'
                                     +6#!8,'62!'
    "%(%"%)*%'                       ,!#9'(#$2"-!%,'

        !"#$%&'                        (Ranks compared on days
                                       immediately after being
                                       featured.)
Becoming a Featured App - “Tips” from devs

 What’s Hot
 - Consistent sales over a period of time
 - “fast-movers” in terms of sales rank
 - Popular apps that have been updated

 New and Noteworthy
 - Use new features of device
 - Uniqueness, Quality, Clean design
MEDIAN Age at debut on “Featured” Lists

    6789!:0,-!                    !('!!
        5/1*,!                  !("!!
        2334,!                                !"(!!
*)-*.-/0)1*)-!                            !#'!!
         )*+,!                               !"&!!

    6789!:0,-!           !%!!                      What’s Hot
        5/1*,!        !$!!                         New &
        2334,!     !#!!                            Noteworthy
*)-*.-/0)1*)-!     !#!!                    MEDIAN Age in Days
                                           when an App gets Featured

         )*+,!      !"!!                   U.S. App Store (Jun/2010 - present)
AVG # of Apps in the Main “New & Noteworthy” List

         84.(*"                       &$"
       506(*275("        $"                                        iPad
('2(3240'.('2"           $"
          ./*01"     #"                                            iPhone
          +,,-*"     #"
           '()*"     #"
         84.(*"                                      !#"
       506(*275("             %"
('2(3240'.('2"           $"
          ./*01"     #"            MEDIAN Weekly # of of Unique Apps
                                   on the Main “New & Noteworthy”
          +,,-*"    !"             List

           '()*"    !"             U.S. App Store (Jun/2010 - present)
Wisdom of the crowd:

    Top 200 Paid
    Top 200 Free
  Top 200 Grossing
Wisdom of Apple:

New & Noteworthy
   What’s Hot
  Staff Favorites
       Final Tip:
Consolidate paid & free
         apps
In-app Purchases and Free Apps

Oct/2009: Apple allows “in-app”
 purchases for Free Apps

Freemium model => unlock
 premium features (demo-to-pay)

Develop, maintain, & market, ONE
 app
“Free” Top 200 Grossing Apps - since June/2010
                     Share of FREE Apps
 3,9$%""$75,++.17$         !*#$

             124+$                        )(#$

            7/82+$          !(#$
                                                        iPad
+,-./0$1234,56.17$               %!#$

 3,9$%""$75,++.17$          !&#$                        iPhone

             124+$       '#$

            7/82+$                 %&#$

+,-./0$1234,56.17$        !"#$          Category Top 200 Grossing Apps
                                        (Jun/2010 - present)
     !"#
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                                                                                        Share of Free Apps has risen steadily




&!%!*!%#
&!%!*!&#
             Free Apps




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             Oct/2009: In-app purchases for




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Questions?




  twitter.com/BIGDATA

  twitter.com/DLIMAN

								
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