Thursday, June 28, 2012

Is App Usage Really on the Rise?

Worldwide smartphone use continues to rise at a rapid rate. In 2011, there were 38 million smartphone users worldwide; in 2012 the figure is at 84 million with the rise in numbers of users comes a rise in the range of apps on the market. Popularity of apps seems to be at an all-time high, with the average user’s smartphone containing on average 41 apps, compared to 32 in 2011. The average user is spending 39 minutes engaging with their apps a day in 2012, a slight rise from 37 minutes in 2011. Competition among app producers is similarly at a high point, with up to 20,000 downloads in the last 24 hours needed for an app to be listed in the top 25 of its kind. This number was 10,000 six months ago.

Despite these soaring statistics, is app usage really on the rise? Only 20% of smartphone users revisit a free downloaded app the next day, and a staggering 5% reuse apps a month later. This has a significant impact on advertising within these apps. For these ‘free apps’, if they were used on average 12 times by the user (a figure which seems unlikely for the typical smartphone user), the application would have to “bombard its users” in order to match the money it would make from paid sales. In dollar terms, the app would need to generate $8.75 per thousand impressions (CPM) to match such revenues raised by paid apps. Currently the average free app generates $0.50 to $2.00 (CPM) from advertising. Despite the growth of apps on the market, Facebook, Youtube and Gmail are still the most popular apps available. Another point of note: deal of the day websites have been used by 87% of all smartphone users.

What conclusions can be drawn from these figures? On the whole smartphone use is growing at a rapid rate, with this comes an expanding market for free downloadable applications. Is app use rising at an equivalent rate? While the average number on apps on a smartphone has risen, the actual usage of such apps drops off very quickly after the first day. This surely attributes to the inability to gain revenue through advertising to match that which paid apps can generate.

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