Mobile analytics firm, Distimo, recently took a look at the effect of price changes on mobile software and found interesting and somewhat obvious statistics. Price drops on Apple’s App Store were noted to be an effective tool used to gain interest and boost revenue over a short time period.
The data found that a total of 850 unique iPhone applications and 930 iPad applications which had changed their price at least once in the month of December. The study found that price changes have a greater effect on the iPhone software as opposed to the iPad. Downloads of iPhone apps increased by 1,665% five days after a price cut, while iPad software downloads grew by 871%.
The firm also found that price cuts resulted in revenue growth rates continuing to grow the longer the app was on sale. An example of this is, revenue for an iPhone app increased 137% five days after a price drop, and 159% a full week after the discount had been put into place. According to Distimo:
There is a two-fold explanation for this lagged revenue growth effect: either an increase in income from one-off fees or an increase in income generated by in-app purchases.
Source: Distimo via AppleInsider