Changes On Downloads & Revenue For iPhone Apps
If you own a mobile app, most likely the question whether you should do a promotional discount for your app popped in your head.
Some data to clarify the impact of such an action comes from Distimo. They specifically looked at Apple’s App Store for iPhone and the App Store for iPad during December 2012 in the 10 largest countries, which are in alphabetical order: Australia, Canada, France, Germany, Italy, Japan, Korea, Russia, United Kingdom and United States. The data came from apps that have reached the Top 400 Overall and changed their price at least one time in December.
The numbers revealed that 850 and 930 unique applications in the Apple App Store for iPhone and Apple App Store for iPad suffered changes in their pricing at least one time. We can observe larger changes in pricing for iPad apps, probably due to the the fact that apps are more expensive on the iPad leaving room for bigger discounts. Changes in prices under 1$ rank for 42% of events on the iPhone as on the iPad they count for 33%. If we’re talking about changes over 5$, they count for 10% on the iPad while on the iPhone 8%.
Now let’s see how these price changes influence the number of downloads on each store. The data retrieved revealed a 1665% increase in downloads after a price decrease on the App Store for iPhone and 871% boost in the case of iPad apps.
When a price increase was made, the downloads decreased by 46% in the case of iPhone apps and by 57% for iPad apps.
Price drops affect revenue immediately and also in the following days, due to an increased download volume and also from in-app purchases. For the iPhone we observe a 159% increase in revenue after a week, and for iPad 71%.
Distimo also looked at price elasticity, which is a number that stands for the change in revenue caused by a 1% price change. For the iPad a 1% decrease in app’s price resulted in a 0.7% increase in revenue aggregated over five days. In iPhone’s case there seems to be a better influence of price drops, a 1% decrease in app’s price led to a 1.2% increase in revenue.
In the end, I believe it comes to experimenting yourself with each app, but this set of data sheds a ray of light on the effect of price changes for iPhone and iPad apps.