Apple users buying 61% more apps, paying 14% more per app

It’s no surprise that the number of apps in the Apple Store keep on growing and growing exponentially. The question is what will the traffic bear? What value do users place on these apps? According to a recent report by analyst Gene Munster of Piper Jaffray, who’s been following the Apple Apps downloads rates against the number of units sold, IOS device owners are not only increasing their app usage, but paying more for them as well.

Munster reports that the typical user will download 83 apps this year compared to 51 in 2010. That’s a whopping 61 percent increase in one year. “Smartphone users are showing an increasing appetite to use apps to add features to their phones and iOS has the leading app ecosystem.” Actually, it looks like a voracious appetite. Granted, the price per app is not that high. Munster reports that 82 percent of App Store business is from free apps, while the 18 percent of downloads that are paid apps average $1.44. This price went up recently, Munster says most likely because the iPad apps are higher than the iPhone an iPod touch.

In fact, Apple says that 15 billion apps have been downloaded from their store over the past three years. Munster adds that this trend demonstrates “the increasing importance of an app store with a broad selection of tested apps,” that are driving Apple device sales. “Smartphone users are showing an increasing appetite to use apps to add features to their phones, and iOS has the leading app ecosystem.”

All this bodes well for app creators and developers. It shows there is a market for their wares. However, it also shows that the competition is going to become even keener, and that it will be continually more difficult to stand out amidst all the contenders.

Highlights from the release :

  • More apps: The average iOS device owner will download 83 apps in 2011 vs. 51 in 2010, a 61% increase year over year. “Smartphone users are showing an increasing appetite to use apps to add features to their phones,” Munster writes, “and iOS has the leading app ecosystem.”
  • More expensive apps: The ASP (average selling price) per app is rebounding. ASPs are up 14% y/y in 20111 vs. an 18% decline in 2010. “After the initial race to the bottom in App Store pricing,” says Munster, “we are seeing users pay up to add features and games to their iOS devices.”
  • More apps than Android: Apple’s App Store has more than 425,000 apps. The Android Market has 200,000. In May, Google  announced its 4.5 billionth app download, compared with Apple’s 15 billion as of July 7.
  • Plenty of free apps. 82% of the apps in Apple’s store are free. The 18% that users have to pay for have an ASP of $1.44. According to Munster, the increase in ASP is driven by the more-expensive iPad apps that represent a growing percentage of app downloads.

Revenue from the App Store represents only about 1% of the company’s total. But without the App Store, Apple wouldn’t be able to sell iPhones and iPads as fast as it can make them.


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