updated 01:30 am EDT, Wed June 27, 2012
Moving beyond number of downloads important, say devs
Industry analysis firm Localytics has found that established app developers for the mobile platforms of iOS and Android have largely moved beyond the stage of valuing the number of downloads above all other measures, and are now working to ensure that customers care about future products, equate the brand with quality and are engaged in in-app purchases. By that measure, iOS users turn out to be more valuable than Android users.
The industry overall improved "customer acquisition and retention" models by 19 percent over last year, but the difference in the two platforms is startling: only 23 percent of Android users are likely to launch an app more than 10 times, while 35 percent of iOS users do so -- a difference of 52 percent.
Retention rates start off strong, but drop dramatically during the first 10 launches of an app. Once users hit 11 launches, they are much more likely to continue regularly using the app. But during those first 10 launches, users quickly decide if the app is one they are going to keep or use often. Retention rates on users who launched an app less than 10 times could sink down to as low as two percent.
By studying data compiled from analytics of apps installed on over 300 million devices across all major mobile platforms, the company determined that as of last March, around 26 percent of downloaded apps were only ever used once. As the market has shifted to the "freemium" model and relies on in-app purchases to keep apps lucrative, getting customers to like the apps and use them routinely is key to selling them future apps, upgrades or help in spreading the word about apps or the company's brand.
The chance of a user launching an app only once dropped by 15 percent between March of 2010 and March of 2011, the period the study covers. More importantly, says Localytics, the number of users likely to launch the app more than 10 times rose 19 percent in the same period. Indeed, nearly a third of users who regularly used a news app (such as the New York Times app) launched it more than 10 times per month, a strong indicator of a loyal customer.
The metrics of the study also show that news apps tend to get launched even more often than users visit news sites. That 30 percent of news app users compared to fewer than 10 percent new site visitors who visit more than 10 times per month. The difference is large but not particularly surprising -- most web visitors have arrived at a site due to search engine results or social links, whereas app users are more engaged and self-select themselves as more valuable customers.
The higher retention rate for iOS is reflective of the iPhone's significantly higher retention rate over Android devices. Piper Jaffray polling indicated that 94 percent of iPhone owners expected their next phone to be an iPhone, compared to 47 percent of Android users planning to stay with the platform. The one-time app usage rate was also lower for iOS users at 21 percent compared to Android's 24 percent. The lowering of the one-time figures over the course of 2010 was attributed mainly to better-quality apps, along with rising levels of discernment by the users.