THE APPSTORE BUSINESS MODEL:A SURVEY WITH CASE STUDIES

Niccolò Feroci, University of Florence – 2012 Graduate

Simone Guercini, Full Professor of Business Economy at the University of Florence

in collaboration with

This presentation is delivered by iStartApp in

collaboration with the University of Florence.

It provides a summary of Niccolò Feroci’s

Bachelor Thesis Work on

"Mobile AppMarketing: Actors and Products"

This content is made available for the

general public. We hope it can provide useful

information for further studies on this vast

and fast-moving market.

FOREWORD

FACTS:

5.9 billions activated sim cards, 1.2 billions with mobile-web support

45% of global territory covered by broadband network (159 countries)

In 2011, for the first time, more smartphones than basic phones sold in the USA

Source: International Telecommunication Union

FACTS:

2005 2006 2007 2008 2009 2010 2011 2012 20130

100200300400500600700800900

50 77 115 140 173

303

488

656

820Smartphones Shipped Wordlwide with 2013 Forecast (MLN)

Annual Shipments – estimates for 2012 and 2013 - source: Gartner; IDC.

iOS Android

17% 52%

2011:WORLD SMARTPHONE

OS MARKET

Operating System market share. Source: Gartner; IDC; Startegy Analytics

FACTS:

iOS Android

27%

55%

2011: USA SMARTPHONE OS

iOS Android

23%

32%

2011: EU SMARTPHONE OS

Source: Nielsen Company

EU:

369 mln Android

346 mln AppStore

China:

12 mln Android

178 mln AppStore

USA:

421 mln Android

430 mln AppStore

Japan:

43 mln Android

83 mln AppStore

AppStorevs

Android Market

January 2012 DownloadsSource: Xyologic Mobile Analysis

Most Innovative Companies :

Ranking/Company

2010 2009 2008 2007 2006

Apple 1 1 1 1 1

Google 2 2 2 2 2

Microsoft 3 4 5 5 5

IBM 4 6 12 9 10

Amazon 6 11 11 20 21

LG electrics 7 27 NP 49 85

Sony 10 14 9 10 14

source: Business Week

As of 2011:

AppStore

About 20% of total app downloaded were paid apps

More than 60% of paid apps costed $0.99

32% of total app downloads were games

Android Market

96% of downloads were free apps

70% of total apps available were free

21% of total app downloads were utility, vs 6% of Appstore

Source: www.chomp.com

Mobile Advertising

eCPM

Japan: $ 1.3 $ 1.7

Fill Rate

Japan: 85% 78%

CTR

Japan: 1.1% 2.3%

Source: blog.inner-active.com

AppStore marketing

AppStore marketing

High expectation among the users

High-end target

More than 500000 apps available

Tough competition

Business model

Free app

Pay app• pay per download • daily or weekly payment • freemium

Good practice for design and marketing

usability functionality

entertainment

promotion

Marketing and communication

• Only one store• more than 500000 apps available• NO advertising on the store

BE CREATIVE

Social NetworksMedia Go global

Pricing

Freemium model generates 72% of total revenues of paid apps

Milestones for app success

solid content (usability,

functionality, entertainment)

smart keywords

choice

regular updates

price drops

Search results:

86%

14%

Android

function searchname search

81%

19%

iOs

function searchname search

CASE STUDIESin collaboration with iStartApp

FileXChange

released 24 April 2011

category:business

FileXChange: update effect

DATES

DO

WN

LO

AD

S

Monthaverage

Update

Significant peak after the first update release

SpeakNotesreleased 24 April 2011

category:business

SpeakNotes: price drop effect

DATES

DO

WN

LO

AD

S

Monthaverage

Pricedrop

Significant peak after halving the price from $1.99 to $0.99

AcknowledgementsGiuliana Scillia

Niccolo’ TosiGiorgia TaurinoIlaria Esposito

Contactsinfo@istartapp.comwww.istartapp.com