[Explained] Android App Stores and App Pricing Fundamentals

The number of Android phones, tablets, apps and app stores keeps on rising. That last one is generally not considered to be such a good thing for the Android ecosystem as it adds to the already fragmented landscape of Android app development. A recent report by research2guidance reveals some interesting statistics about app pricing and sales in various Android app stores. Here’s what developers need to know about the multitude of Android app stores.

Application Pricing By App Stores:

Android has always been seen as a “free” market and the monetization of apps is seen as hard.  A lot is hidden in the app pricing when it comes to successfully monetizing an app. Here’s a crash course on app pricing in different app stores.

There are two types of app stores

1) Full catalogue stores: These are independent stores that provide applications for all major mobile platforms, including Android, BlackBerry, Symbian, Windows Mobile, etc. The most popular of these stores is GetJar.

2) Android specialist: These app stores concentrate on offering Android apps only. Popular ones are Amazon AppStore, AndroidPIT etc.

image

The overall average selling price in the Android Market has decreased over the last few months and currently stands at US$3.07. Interestingly, the average price of Top100 paid apps is over twice as high – US$6.47. This means that many users do not mind paying a substantial price for what they think is a good application.

Full-catalogue stores have a much higher average price for their best-selling apps, whereas users’ willingness to pay significant prices in Android specialist stores is lower than in the Android Market.

Users of full-catalogue stores are accustomed to the idea of paying for apps. Full-catalogue app stores are generally more targeted towards improving developer monetization opportunities, and offer a range of additional app promotion options.

Android specialist app stores feature rich developer and user communities that get engaged in frequent app reviews and discussions. Thus developers can use Android specialist stores to generate some social media buzz, and consumers – to find better, and often cheaper, applications. This explains the significantly lower average prices of Top100 paid apps.

Application Pricing by Categories:

image

Users would not pay more than US$1.50 for a ringtone, but they would pay US$4 for a book in the Android Market. Furthermore, users of independent stores pay as much as US$11.56 for best-selling books.

Reasearch2guidance says some publishers use independent app stores as test markets. There are applications that are placed at a significantly higher price in these stores, compared to the Android Market. Developers try to take advantage of users’ willingness to pay more in independent app stores.

‘Medical’ and ‘Business’ apps stand out in the Android Market as the most expensive, sold on average for US$18.03 and US$7.23 respectively. The average selling price of other categories of apps ranges from US$1.31 to US$4.36.

Personalization apps are the cheapest, but share of paid apps in this category is highest of all. Users are used to paying for this type of content, and therefore generate a higher rate of paid downloads compared to some other categories.

Android Market growth figures:

image

Android Market remains the fastest growing major app store in the market. Its average weekly growth rate in June was 1.9%. During the second quarter of 2011, the total number of apps in-store increased by 30%.

36% of all apps on the Android Market are paid apps. The share of paid apps actually fell and only 35% of all apps added in June were paid apps. This means there is still huge potential for quality paid apps.

The actual number of active apps in-store grew by 21,000. Average weekly net additions in June were 400 apps higher than in May (4,236 net new adds per week in June versus 3,831 in May).

Add comment

NextBigWhat brings you curated insights and wisdom on product and growth from the wild web.

Over 2 million people receive our weekly curated insights.

Newsletter

Newsletter