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Android Market Insights

Vol. 3
Published 8th of July 2011

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Android Market Insights

June 2011 Junes Headlines
The Android Market continued its steady growth in June 2011 in terms of total app number. Average app selling price keeps on dropping. In this volume we give a special overview of app pricing differences in independent app distribution platforms. Android Market Insights | June 2011 Key insights in June are: As of the end of June the Android Market contained 237,199 apps During the second quarter of 2011 the total number of apps in store increased by 30% In June the net new-adds featured 35% paid apps, further reducing the share of total paid apps in store to 36% Average selling price in the Android Market currently stands at US$3.07, whereas the average price of the Top100 paid apps is more than twice as high US$6.47 Compared to the Android Market full-catalog stores have much higher average price of best-selling apps, whereas in Android specialist stores it is significantly lower Average price per category in the Android Market ranges from US$1.31 to US$18.03.

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Android Application Pricing

Android Market is often perceived as a free market, and developers often have difficulties generating substantial revenue inside of it. Understanding the existing pricing differences within the store, as well as the opportunities offered by alternative distribution channels, might help publishers to make better decisions. There are two types of independent stores where developers can submit their applications: Full-catalog stores: independent stores that provide applications for all major mobile platforms, including Android, BlackBerry, Symbian, Windows Mobile, etc. Android specialists: niche stores concentrating on the distribution of Android applications only.

The overall average selling price in the Android Market has decreased over the last few months and currently stands at US$3.07. Interestingly, the average price of Top100 paid apps is over twice as high US$6.47. This means that many users do not mind paying a substantial price for what they think is a good application. A comparison of alternative stores for Android application distribution shows that full-catalog stores have a much higher average price for their best-selling apps, whereas users willingness to pay significant prices in Android specialist stores is lower than in the Android Market. F IGURE 1: AVERAGE PRICES OF T OP100 PAID APPLICATIONS IN DIFFERENT ANDROID APP
STORES
$9.10

$8.87
$7.98 $7.67 $6.47

$3.30

$3.17

$2.68

$2.52

Handango MobiHand

Handster PocketGear

Android Market

AndroidPit

SlideME

Appoke

Amazon

Full-catalogue stores
Source: research2guidance.

Android specialists

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Android Market Insights | June 2011

It is notable that full-catalogue stores are the incumbents of the app market, some having been launched already in 2000. Initially the average app selling price in these stores was as high as US$20, with only a small share of apps being given away for free. Apparently, users of these stores are accustomed to the idea of paying for apps. These app stores are generally more targeted towards improving developer monetization opportunities, and offer a range of additional app promotion options. The new generation of niche stores is relatively young, and came into play within last two years, after the Apple App Store changed the concept of the smartphone application market. They feature rich developer and user communities that get engaged in frequent app reviews and discussions. Thus developers can use these stores to generate some social media buzz, and consumers to find better, and often cheaper, applications. This explains the significantly lower average prices of Top100 paid apps. The same principle applies to different categories within app stores. Users would not pay more than US$1.50 for a ringtone, but they would pay US$4 for a book in the Android Market. Furthermore, users of independent stores pay as much as US$11.56 for best-selling books. The following table compares the ranges of average best-selling app prices in independent stores and in the Android Market per major application categories. F IGURE 2: RANGE OF AVERAGE PRICE OF T OP100 PAID APPS PER CATEGORY IN DIFFERENT A NDROID APP STORES (JUNE 2011)
$12.00 $10.00 $8.00 $6.00 $4.00 $2.00 $0.00 Max. independent store price Min. independent store price Android Market Top100 paid

Android Market Insights | June 2011

Books & Reference 11.56 1.78 3.92

Tools / Utilities 7.85 2.47 2.93

Entertainment 5.42 1.70 2.67

Personalization 4.32 1.27 1.51

Games 3.76 1.92 2.94

Base: Top100 paid apps per category in Android Market, MobiHand, PocketGear, Handango, Handster and Amazon App Store. Source: research2guidance.

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Our research shows that some publishers use independent app stores as test markets. There are applications that are placed at a significantly higher price in these stores, compared to the Android Market. Developers try to take advantage of users willingness to pay more for apps in these stores. Clearly it makes sense for developers to take a deeper look into the user habits of different app categories. Selecting the right category in the Android Market, with potentially a higher price in the top ranks, could create higher revenue streams. Developers should also choose appropriate business model for applications distributed in independent stores, to benefit from their higher price levels and different user habits. Some stores are better at distributing free applications, some are better at highlighting discounted apps and special promos, others work best for high-priced, quality content. Android Market Insights | June 2011 5

Android Market key metrics overview

Android Market remains the fastest growing major app store in the market. Its average weekly growth rate in June was 1.9%. During the second quarter of 2011, the total number of apps in-store increased by 30%. As of the end of June it features 237,199 apps, 36% of which are paid. F IGURE 3: APP NUMBER DYNAMICS (JUNE 2009 JUNE 2011)
45% 40% 35% 30% 25% 20% 15% 10% 5% 50,000 150,000 200,000 250,000

100,000

0%

Free
Sources: research2guidance, AndroidPIT

Paid

Share of paid

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In June 38,500 new apps were submitted to the Android Market. The actual number of active apps in-store grew by 21,000. Average weekly net additions in June were 400 apps higher than in May (4,236 net new adds per week in June versus 3,831 in May). The share of paid apps added remains below the total paid app ratio in store: in June the new adds featured 35% paid apps. F IGURE 4: APP NUMBER DYNAMICS IN LAST FIVE WEEKS
250,000 216,018 200,000 +1,783 150,000 +1,690 +2,209 +1,018 +680 220,974 225,338 234,172 237,199

230,593

Android Market Insights | June 2011

100,000

50,000

+3,174

+2,673

+3,046

+2,562

+2,347

0
27/05 03/06 10/06 Free
Sources: research2guidance, AndroidPIT

17/06 Paid

24/06

01/07

Within the Android Market app prices also vary greatly from category to category. Medical and Business apps stand out in the Android Market as the most expensive, sold on average for US$18.03 and US$7.23 respectively. The average selling price of other categories of apps ranges from US$1.31 to US$4.36. Personalization apps are the cheapest, but share of paid apps in this category is highest of all. Users are used to paying for this type of content, and therefore generate a higher rate of paid downloads compared to some other categories. For further insights on the app developer market look into the new research2guidance report The Market for Mobile Application Development Services: Selling the Spades for the App Gold Diggers, released in July 2011. Click here for more details

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About research2guidance
Research2guidance is a market intelligence and consultancy company specializing in the mobile apps market.

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About AndroidPIT
AndroidPIT is one of the leading websites for everything Android, with more than 3 million monthly unique visitors worldwide. Android users, experts, enthusiasts and developers get together at AndroidPIT for the latest news from the Android world, to communicate, discuss and support each other. The AndroidPIT App Center, which is already installed on more than 2 million devices, offers several thousands of free and paid applications for direct download. Every week different top applications are featured with up to 70% discount. The AndroidPIT App Center (native store app) runs on every Android compatible device and provides users a comfortable access to the international app portfolio. It is also operated as a partner store and white-label partner store solution for several different companies, i.e. HANNSPREE, Shuttle and 1&1.

Android Market Insights | June 2011

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