Apple App Store propels in-app purchases, but downloads are slowing

Apple's App Store recently celebrated its fourth anniversary and during the store's brief tenure it has fundamentally changed how consumers use their cell phones.  Analytics firm Distimo studied the App Store's impact on the market, noting that there are now 650,000 apps available, compared to 500 when the App Store launched in July 2008.   

Interestingly, Distimo also found most of the growth for developers has occurred in free applications. Over the past two years, daily downloads among the top 200 most popular free apps have grown from 7.7 million to 16.8 million. Meanwhile, the volume among the top 200 most popular paid applications increased by 13 percent, while the averaged selling pricing declined by 16 percent. Distimo notes that customers still don't like paying for applications but will pay via in-app purchase after they have tried a free app.

Distimo Chart

Among the 300 most popular free apps in the U.S., 77 percent of all games feature in-app purchases.

Not surprisingly, Distimo found that gaming apps drive a lot of in-app purchases. About 21 percent of all free games feature in-app purchases. Among the 300 most popular free apps in the U.S., 77 percent of all games feature in-app purchases. In-app purchases are also popular among free apps in the Newstand category, where 74 percent of apps feature in-app purchases. Likewise, 91 percent of the top 300 most popular free Newstand apps feature in-app purchases, Distimo found.

For more:
- see this Distimo report

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