iPad - Two Years In Review

By Gert Jan Spriensma, Analyst at Distimo

Apple App Store for iPad

IPAD

Distimo was founded to solve the challenges created by a widely fragmented app store marketplace filled with equally fragmented information and statistics. Distimo was launched shortly after the introduction of the first app store. App stores have clearly shown since that time that they are the way forward for content distribution. The app store model offers an enormous opportunity for developers to get their content out and dramatically improves content discovery by consumers. However, the mobile market has long been characterized by fragmentation, which is also displayed in the wide range of mobile application stores that were launched from 2009 on. Distimo is a privately held company based in Utrecht, The Netherlands. Learn more: www.distimo.com

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Distimo Publication - March 2012

NEW AND NOTEWORTHY

This report offers an extensive analysis of the Apple App Store for iPad. It dives into the general characteristics of the app store and aims to give developers better insights to base their strategy upon. All data covers the Apple App Store for iPad in the United States in February 2012 unless otherwise noted. The major findings are: iPad users are willing to pay for premium content offered by newspapers and magazines in the Newsstand category. The category launched only six months ago, however more than 70k USD per day is already being made by the top 100 grossing Newsstand applications in the United States. The top grossing applications include: The Daily, NY Times for iPad and The New Yorker Magazine. The United States has been eclipsed by China as the largest market for free applications in the world for the first time in the history of the Apple App Store for iPad. During February 2012, the number of daily downloads in the top 300 most popular free applications in China exceeded 1.1M, while the volume among the top 300 most popular free applications on each day in the United States was just below 1M. The United States remains the highest grossing country for the Apple App Store for iPad. The top countries that developers should aim for if they have a one-off or inapp strategy aside from the US are: Australia, Canada and the United Kingdom. Free Weather, Newsstand and Entertainment are the most attractive categories in terms of downloads per applications (we divide the volumes in the top 100 most popular free applications in each category by the number of available free applications in that category). Ten percent of all applications in the Apple App Store for iPad already feature in-app purchases compared to 6% in the Apple App Store for iPhone and 2% in Google Play. Seventy-four percent of the applications feature in-app purchases when we look at the top 200 highest grossing applications in the Apple App Store for iPad.

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Distimo Publication - March 2012

INTRODUCTION
The first iPad was released roughly two years ago and Apple has already sold over 50 million devices worldwide. The Apple App Store for iPad has quickly become an important platform for developers. However, the characteristics of distribution for the tablet form factor are different from those of phones. Currently, the first attempts to catch Apple and its iPad tablet domination are being made by various manufacturers. Most of these manufacturers already ship tablets with Android Honeycomb or Ice Cream Sandwich, both optimized for tablets, and the first Windows 8 Tablets are expected to hit the market later this year. Given the anticipated market boom in tablet devices, we dive into the data to reveal best practices.

GROWTH PATTERN OF THE APPLE APP STORE FOR IPAD IN LINE WITH OTHER (LARGER) STORES
Two years post-launch, there are over 180K applications available in the Apple App Store for iPad in the United States as of February 2012, which means that the Apple App Store for iPad is growing at roughly the same pace as the Apple App Store for iPhone and Google Play, which had 200K and 175K applications available respectively, after two years in business. Newer stores like the Windows Phone 7 Marketplace will have a hard time reaching the same number of applications as Marketplace has only 65K applications available after 18 months in business. The graph below displays the road to reaching 180K applications and remarkably, the growth is almost linear.

Naturally, this received an initial boost from the iPhone applications that could be easily ported to the iPad, however the graph also shows the proportion of universal applications one binary (app) for both the iPad and iPhone - which increased over time from 33% to over 61% in February 2012.

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Distimo Publication - March 2012

The high level of universal applications reveals that both systems are highly interconnected and enforce each others growth, where successful iPhone applications are often ported to the iPad and vice versa. Since a developer could potentially charge twice when offering a separate iPad and iPhone app, one might expect to see a lower proportion of paid applications being universal. However, the proportion of universal applications ranges around 61% for both free and paid apps.

LARGEST TABLET APP STORE

Compared to the Apple App Store for iPhone and the other stores that stock tablet applications, we see that the Apple App Store for iPad is the second largest store, after the Apple App Store for iPhone and Google Play in the United States. However, only a small proportion of applications in Google Play are optimized for tablets. When we look at the Samsung Appstore (which Distimo recently started tracking and is now also available for developers to track in Distimo Monitor), we see that roughly 32K Android applications are available in the device stores for tablets (Galaxy Tab 10.1, Galaxy Tab 7.0 and Galaxy Tab). The majority of applications are available for the Galaxy Tab and Galaxy Tab 10.1 only, but there are also a substantial 4K applications available for the Galaxy Tab 7.0, which has a different screen ratio. Please note that U.S. specific data was not available for the Samsung Appstore and BlackBerry App World, and thus worldwide data is used instead.

10% OF ALL IPAD APPLICATIONS FEATURE IN-APP PURCHASES

The Apple App Store for iPad is among the most expensive app store around, but higher prices do not tell the whole story anymore, as in-app purchases are increasingly used as the primary source of revenue. Ten percent of all applications in the Apple App Store for iPad feature in-app purchases compared to 6% in the Apple App Store for iPhone and 2% in Google Play. Moreover, the proportion of universal applications that feature in-apps is even higher: 11% of all universal applications feature in-apps.

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Distimo Publication - March 2012

When we look at the top 200 top grossing applications in each of those stores 74%, 80% and 56% of the applications feature in-app purchases in the Apple App Store for iPad, the Apple App Store for iPhone and Google Play, respectively. This means that regardless of the proportion of applications that feature in-app purchase, the model is adopted by the majority of the top grossing applications in each store. Therefore, for many developers it is a serious backdrop that other app stores like Windows Phone 7 Marketplace do not (yet) support in-app purchases, as these figures have proven it to be a successful business model for developers.

NEWSSTAND APPLICATIONS MAKE IT TO THE TOP LISTS ON IPAD

When we look at the Apple App Store for iPad compared to app stores for phones, a larger importance can be attributed to paid Productivity and Educational applications, however just like on the other platforms, Games is the single most important type of application (50% of all top paid applications are Games). When we look at free applications, the Entertainment and Games categories have been popular since launch, but recently the Newsstand category has started to gain a lot of traction. This category is also bringing in a substantial proportion of the revenue, with over 7% of the top 200 grossing applications coming from this category. This revenue is almost solely based on in-app purchases.

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WEATHER APPLICATIONS ARE RELATIVELY MOST DOWNLOADED

We also look this month at the metrics that are most important to iPad application developers. First, we will identify what types of applications tend to be popular (high download volumes in the United States), but have a relatively low number of available applications, i.e., there is an opportunity to develop those kinds of applications.

The graph above shows the download volumes (noted in pink) of the top 100 most popular free applications per category, and the number of free applications (noted in grey) that are available in that category. When we divide the volumes by the number of available applications, we find a measure for the number of downloads per application in that category. This is an interesting metric for developers; there seems to be a big need for Weather (63x) applications compared to the number of applications available. The same rings true for Newsstand (45x) applications as well, while the two largest categories Games (32x) and Entertainment (43x) are also among the top 5. There seems to be a relatively low need for free content among consumers in categories like Business and Medical. However, we have to assess this with caution because another explanation might be that there is simply no good free content. For example, developers of Business applications might expect users to be willing to pay for applications and hence the free offering only consists of inferior applications. You can find more information about the download figures for paid applications per category in our monthly featured reports for North America.

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NEWSSTAND GAINING IN REVENUES AND POPULARITY

From the two metrics just discussed, the Newsstand category is interesting from a download and revenue perspective. The category launched only six months ago, however more than $70K USD is already being made daily by the top 100 grossing Newsstand applications in the United States. This is significant as the sum of the revenue from the top 200 top grossing applications in each country was 2M USD (discussed in more detail later in this report). The top 5 top grossing Newsstand applications in February 2012 are depicted on the right.

CHINA LARGER MARKET THAN U.S. FOR FREE APPLICATIONS

As discussed in some of our earlier publications, the applications market is a global game. However, developers have to localize their applications to be really successful worldwide. The world map below displays the download figures of the 300 most popular free applications per country.

The United States has been eclipsed by China as the largest market for free applications in the world for the first time in the history of the Apple App Store for iPad. During February 2012, the number of daily downloads among the top 300 most popular free applications in China exceeded 1.1M, while the volume among the top 300 most popular free applications on each day in the United States was just below 1M. We have referred multiple times in our monthly publications to the need of developers to adopt a worldwide strategy. Now for the Apple App Store for iPad, China is the largest country in terms of free downloads while Asia is the largest continent in terms of free downloads as well.

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Distimo Publication - March 2012

The February 2012 download volumes in the U.S. have been down significantly, probably in anticipation of the new iPad, while the month-over-month previous increase remained steady in China. It remains to be seen if China will stay the largest market, when we anticipate that the download volumes in the U.S. will recover next month. However, regardless of whether or not China will be the number one country, developers of free applications without a single-country-strategy should make China a part of their strategy. Based on the top 200 most grossing applications across the world we see a different picture when looking at revenues. While the United States remains the top grossing country, China is not even among the top five most grossing countries. Aside from the United States, the countries that developers should aim for if they have a one-off or inapp strategy are the United Kingdom, Australia and Canada. We offer more insights into paid downloads including the distribution between in-apps and one-offs in the different regions in our paid featured monthly report.

RECAP
This publication focuses on the Apple App Store for iPad after its first two years in business. One of the most remarkable findings is that China took over as the leading Apple App Store for iPad globally in terms of downloads, although it lags behind in terms of revenues from in-apps and one-offs. For developers the best opportunities to develop free applications on the iPad are given, and Weather, Newsstand and Entertainment are the most attractive categories. The Newsstand is, six months after its launch, already one of the most revenue generating categories, as the top 100 most grossing Newsstand applications generate 70K per day in the U.S. only. Finally, although only 10% of all iPad applications feature in-app purchases, the majority (74%) of the most grossing applications adopt an in-app strategy.

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DISTIMOS PAID FEATURED FEBRUARY 2012 REPORT FOR ASIA, NORTH AMERICA AND EUROPE STARTING AT 399
Our Paid Featured February 2012 reports offer deep insights into all major applications stores in North America, Europe and Asia. The reports will allow you to: Analyze the download volume generated in the Amazon Appstore (North America only), Apple App Store and the Apple Mac App Store and the revenue generated in the Apple App Store and Google Android Market. Identify the most successful regional applications and their publishers in each store individually. Analyze the share of revenue generated by apps with in-app purchases in each region individually.

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HIGHEST RANKED ALL TIME PUBLISHERS

IPAD

APPLE APP STORE FOR IPAD - UNITED STATES - APRIL 2010 - FEBRUARY 2012
Publisher Apple Application Example Pages Category Books, Education, Entertainment, etc Books, Games Books, Business, Entertainment, Games, Lifestyle Games

Rank 1

Electronic Arts

TETRIS for iPad

Chillingo Ltd

Cut the Rope HD

Rovio Mobile Ltd.

Angry Birds HD

Gameloft

Dungeon Hunter 2 HD

Books, Education, Games Books, Entertainment, Games, Medical Games

Out Fit 7 Ltd.

Talking Roby elik the Robot for iPad

Halfbrick Studios

Fruit Ninja HD

Zynga

CityVille Hometown

Games Entertainment, Games, Lifestyle, Photography, etc Games

Disney

Handy Manny Workshop on iPad Awakening: The Dreamless Castle HD

10

Big Fish Games, Inc

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Distimo Publication - March 2012

DISTIMO CUSTOM REPORTS

Aside from this free monthly publication, Distimo produces custom reports capable of providing specific mobile application store analytics that are relevant to your company. Custom reports are currently available for any country worldwide for the Amazon Appstore, Apple App Store for iPhone, Apple App Store for iPad, Apple Mac App Store, BlackBerry App World, GetJar, Google Android Market, Nokia Ovi Store, Palm App Catalog, Windows Phone 7 Marketplace. Additional application stores will be available in the coming months. To get a better idea of the type of data and metrics that Distimo can provide, please visit our Report product page.

CONTACT US
For sales enquiries, please contact Remco van den Elzen, VP Business Development at remco@distimo.com or call +31 30 82 00 567. For press enquiries please contact Mindy M. Hull at mindy@mercuryglobalpartners.com or call +31 62 504 7680 (EU) or +1 415 889 9977 (USA).

ABOUT DISTIMO
Distimo was founded to solve the challenges created by a widely fragmented app store marketplace filled with equally fragmented information and statistics. Distimo was launched shortly after the introduction of the first app store. App stores have clearly shown since that time that they are the way forward for content distribution. The app store model offers an enormous opportunity for developers to get their content out and dramatically improves content discovery by consumers. However, the mobile market has long been characterized by fragmentation, which is also displayed in the wide range of mobile application stores that were launched from 2009 on. Distimo is a privately held company based in Utrecht, The Netherlands. Learn more: www.distimo.com

Disclaimer This work is licensed under Creative Commons License Attribution Noncommercial-Share Alike 3.0 Netherlands. This license is available for download at http://creativecommons.org/licenses/by-nc-sa/3.0/nl/. This license ables you to use, copy, spread, and build upon this work non-commercially, as long as you credit Distimo and license your new creations under the identical terms.

Distimo 2012, some rights reserved. All trademarks are the property of their respective owners.