The iPod touch and iPhone are revolutionary platforms for mobile computing. KPCB is allocating $100M towards the platform. Yet, despite numerous group studies and opinion surveys, there is limited market research and even less market intelligence that enable entrepreneurs to write sound business plans.
To help, MaRS is working to provide entrepreneurs with the metrics and figures that would enable them to strategically plan, effectively manage and successfully launch applications for the iPod touch and iPhone. Ready for some facts ‘n’ figures about this much-hyped platform?
Apple sold 13.7M iPhones in the 2008 calendar year; exceeding its original 10M target. Between October and December, Apple sold 4.4M iPhones and more than 5M iPod Touch. In that same period of time, approximately 400M apps were downloaded from the Apple App Store. Since the announcement of the App Store in March last year, and the opening in July, more than 550M apps have been downloaded onto an iPod touch or iPhone.
The Apple App Store is tailored to 62 countries today. With more than 300,000 downloads of the iPhone SDK, there are now more than 18,000 apps in 20 categories: 14,000 are paid apps, 4,000 are free apps. Only three of the 18,000 apps in the App Store are from Apple, with less than one per cent market share.
The most competitive categories are games, entertainment, utilities, education, books, lifestyle, and reference. The games category is twice as competitive as entertainment with more than 4,400 apps — 1,000 of which are free games. With 300 apps, social networking has one of the fewest numbers of apps. The category with the least activity is weather.
There are 19 subcategories within games. The most competitive subcategories are puzzle, arcade, action, family, board, and educational. Although racing is at the bottom of this list, four of the top 10 games in 2008 are racing games.
The book value of all apps in the App Store portfolio is approximately $50,000 at about $2.80/app. The average price of the top 20 apps in 2008 is approximately $3.50/app. Top games average at a price of $4.25/app. Consumers are willing to pay above expected value for top-rank, featured apps. For instance, consumers are paying $10 to $20 for high-quality communication and utility apps.
Despite the enthusiasm in terms of number of apps, the Entertainment category has one of the lowest market value at $1.50/app with the least word-of-mouth reach. Games have the most word-of-mouth reach with Puzzle and Racing games leading the pack. However, racing games are generally twice as large as puzzle games, which in turn are generally 2 to 3 times as large as other apps. For details, visit here for the raw data on Google Spreadsheets.
In our upcoming market intelligence report, we’ll focus on the following questions:
- What is the estimated economical model of the Apple App Store?
- What are the strategic implications for entrepreneurs?
- How much of the experience begins on the desktop?
- How much do consumers typically pay per app?
- How much are consumers willing to spend overall?
- What is the typical conversion rate from free app to paid app?
- Which category has more reach across genres?
- What is the estimated number of downloads and revenue to realistically expect?
What other questions would be useful to you? If you can think of other questions or would like to leave a comment, please enter them in the comment box below. You can also reach us on Facebook and me, our mobile market intelligence analyst, on Twitter.
And if you’re interested in mobile applications, be sure to come to the first MobileMonday event at MaRS.
Tim Tang is an Industry Analyst on the Market Intelligence team at MaRS. He charts technology landscapes and thinks about digital economies at the intersection of digital media, software and hardware in the 21st century. Before MaRS, Tim worked at Rogers Communications as a Business Analyst and Maplesoft on the international sales team. He has won the national JCI Best Business Plan competition and represented Canada at the World Congress in Vienna, Austria.
