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Thread: Study Finds Correlation Between iOS App Price Drops and Average Revenue Growth

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  1. #1
    MMi Staff Writer Akshay Masand's Avatar
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    Default Study Finds Correlation Between iOS App Price Drops and Average Revenue Growth


    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.
    Not surprisingly on the other hand, going in the opposite direction and increasing the price caused cumulative downloads to drop by 46% over five days on the iPhone and 57% after five days on the iPad. Overall, the data shows that customers are more sensitive to price changes on the iPhone than they are on the iPad. It was concluded that price drops, particularly though sustained for at least a week, are a smart play for developers who are looking to increase downloads and revenue.

    Source: Distimo via AppleInsider

    Twitter: @AkshayMasand

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    I buy my apps when they are either free or on sale.
    I never buy at full price.

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    iPhone? More like MyPhone rockyseay's Avatar
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    I use apps gone free and I only get them then. I hardly ever buy an app. Now I do make in app purchases though.

  4. #4
    *T*
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    No sh** Sherlock lol. Why else would apps lower their prices?

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    iPhoneaholic aidanharris's Avatar
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    Quote Originally Posted by *T* View Post
    No sh** Sherlock lol. Why else would apps lower their prices?
    Exactly. You don't need a big study to show that more apps are bought over the Christmas and January period than other times of the year because they are reduced...

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    My iPhone is a Part of Me Feanor64's Avatar
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    LOL im amazed why people even do studies like this they dont even have common sense anymore i mean people get trampled to death on black friday for a few bucks off a tv of course this is true what a waste of time

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