App Price Drops boost downloads by 1,665% on iPhone 871% on iPad
A new report released last week by analytics firm Distimo revealed that when the price drops for iPhone apps on average downloads grow by 1,665% for a whole five days. On iPad price drop increases downloads by 871% on average after 5 days.
In December 2012, Distimo found that 850 iPhone apps and 930 iPad apps had changed prices at least once, out of the some 12,000 apps that had ranked in the top 400 across 10 key Apple Apps Stores worldwide. The majority of all price changes was less than $3.00. The numbers skewed lower on iPhone, where 42% of changes were in the range of $1.00-$2.00, while on iPad 20% of apps had a change larger than $4.00.
In contrast to a price drop increasing downloads a price raise doesn’t have the same level of impact when it comes to decreasing downloads. Distimo found a price raise on the iPhone App Store would decrease download volumes by 46%. On the iPad App Store, that number is 57%.
Although a price drop can help an app move up the charts, developers also hope that the increase in volume will make up for the fact the price is lower. As it turns out, revenue growth does kick in around day 3 after the sale begins, Distimo says. Revenue in the App Store for iPhone went up by 95% and by 51% for the iPad.
Interestingly enough, revenue growth continued well into day 5 and 7 as with increases of 137 and 159%. On iPad, those numbers are somewhat lower but still increases – 63% after 5 days, and 71% after a week.
Distimo’s latest report also found the iPhone and iPad App Stores to show more price elasticity. On iPhone, a 1% drop led to a 1.2% increase in revenue after 5 days. On iPad, a 1% drop lead to a revenue gain of 0.7%.
When examining which top 10 apps benefited the most in December from price drops, the majority on iPhone were in the games category, while iPad had a slightly more diverse mix which also included a couple of educational apps for kids, for instance.
Kevin is an Online and Mobile Marketing Strategist who has worked with companies of all sizes over the last 6 years. You can follow Kevin on any of the social platforms below.
