Mobile Apps: Models, Money and Loyalty
This article comes from the Flurry Smartphone Industry Pulse, August 2009.
The data in this report is computed from a sample size of over 2,000 live applications and over 200 million user sessions tracked each month across Apple (iPhone and iPod Touch), Google Android, Blackberry, JavaME platforms.
Understanding Mobile App Retention: They Use or You Lose
With more than 75,000 applications in the App Store, consumers have a vast choice of alternatives to the applications they have already downloaded. And while discovery of new applications is a challenge for consumers, retaining users can be equally difficult for developers. To shed light on the kinds of applications that tend to be used over a longer period of time, Flurry studied user retention across 19 categories over a 90-day period. We monitored if consumers returned to use a downloaded application within 30, 60 and 90-day periods, as well as how frequently consumers used applications over those time periods. Flurry measures user retention by the number of users who downloaded an application, at any time in the past, and used that app within the last seven days.
Reviewing the chart on the previous page, Quadrant I is comprised of the most frequently used apps over the longest period of time; categories like News and Reference (e.g., Dictionaries, Thesauruses, Recipes, etc.). Thinking about News apps, this makes sense given that news content is constantly being refreshed, providing consumers nearly infinite value over time. This logic continues to hold up when we consider that news apps get re-used more than once per day, at a rate of 11 times per week.
On the other end of the spectrum, in Quadrant III, we find the Entertainment category, which could better be described as a collection of "gimmick" apps (think Lighter, Fart, IQ Test and Ringtone apps). Once downloaded, these apps are typically used only a few times and then abandoned.
In Quadrant II, we find categories like Books and Games, among the two largest app categories in both the App Store and Android Market. These application categories are characterized, on average, by intense usage over a finite period of time. Because games and books offer content that typically is consumed only once, the user usually moves on after reading a book or finishing a game.
Finally, Quadrant IV contains Productivity (e.g., List, Drawing, Wi-Fi Finder apps), Navigation and Medical apps. These kinds of apps remain on a consumer's handset for a long period of time, but get used only occasionally. Unlike "gimmick" apps, they are perceived as having sustainable value and therefore consistently revisited over time.
Mapping categories by usage frequency and retention also provides insights into pricing models. Quadrants I and IV (the right-hand side) are better suited, on average, to subscription (if supported by the respective app storefront) and advertising-supported models. The main reason is that these apps have perceived enduring value by consumers over a long period of time, and therefore more successfully retain their user bases. For ad-supported apps, this high repeat usage translates into more ad impressions served. Categories on the left-hand side, Quadrants II and III, are better suited for one-time download fees. Those apps may provide higher immediate satisfaction to users but their content, once consumed, rapidly loses their value.
For more data on retention by category, as well as frequency of use, we provide the chart below: