The AppStore Business Model: A Survey With Case Studies
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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
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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
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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
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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
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FACTS:
iOS Android
27%
55%
2011: USA SMARTPHONE OS
iOS Android
23%
32%
2011: EU SMARTPHONE OS
Source: Nielsen Company
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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
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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
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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
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Mobile Advertising
eCPM
Japan: $ 1.3 $ 1.7
Fill Rate
Japan: 85% 78%
CTR
Japan: 1.1% 2.3%
Source: blog.inner-active.com
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AppStore marketing
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AppStore marketing
High expectation among the users
High-end target
More than 500000 apps available
Tough competition
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Business model
Free app
Pay app• pay per download • daily or weekly payment • freemium
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Good practice for design and marketing
usability functionality
entertainment
promotion
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Marketing and communication
• Only one store• more than 500000 apps available• NO advertising on the store
BE CREATIVE
Social NetworksMedia Go global
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Pricing
Freemium model generates 72% of total revenues of paid apps
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Milestones for app success
solid content (usability,
functionality, entertainment)
smart keywords
choice
regular updates
price drops
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Search results:
86%
14%
Android
function searchname search
81%
19%
iOs
function searchname search
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CASE STUDIESin collaboration with iStartApp
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FileXChange
released 24 April 2011
category:business
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FileXChange: update effect
DATES
DO
WN
LO
AD
S
Monthaverage
Update
Significant peak after the first update release
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SpeakNotesreleased 24 April 2011
category:business
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SpeakNotes: price drop effect
DATES
DO
WN
LO
AD
S
Monthaverage
Pricedrop
Significant peak after halving the price from $1.99 to $0.99
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AcknowledgementsGiuliana Scillia
Niccolo’ TosiGiorgia TaurinoIlaria Esposito