We know smartphone and tablet owners like to buy games. But if you go by a new ABI exploration of user habits, most of us aren't buying much of anything. More than 70 percent of the crowd spends little to nothing on mobile apps, dragging down the average of $14 spent per month among paying customers to a median of $7.50 when you include the skinflints. As you might imagine, that leaves the remaining 30 percent making up for a lot of slack: three percent of downloaders represent a fifth of all the spending in the mobile app world. Researchers suggest that developers focus on a long-term strategy of freemium pricing or utility apps to get more customers buying, but we imagine that writing more games about catapulting frustrated birds might just work out on its own.
ABI Research: 3% of Users Account for One-Fifth of All Money Spent on Mobile Apps
LONDON, May 14, 2012 (BUSINESS WIRE) -- According to a US consumer survey conducted by ABI Research, about two-thirds of app users have spent money on an application on at least one occasion. Among these paying users, the mean spend was $14 per month. Behind the seemingly high average amount there are, however, some striking findings.
Senior analyst Aapo Markkanen explains, "The median amount among the consumers who spend money on apps is much lower than the average, just $7.50 per month. This reflects the disproportionate role of big spenders as a revenue source. The highest-spending 3% of all app users account for nearly 20% of the total spend, while over 70% spends either nothing or very little."
The numbers also reflect certain trends in different app categories. Thus far, the releases that have best succeeded in making money have typically been utility apps often used for business purposes, or iOS games monetized through strings of in-app purchases. In both cases the money comes from a remarkably small base of customers. Is there anything developers can do to boost the conversion rate from free to premium?
Markkanen has two recommendations. "First, don't get obsessed by mobile and apps, but remember also the web," he adds. "Most of the successful app concepts either support, or are supported by, a web component. Second, see your product through a long-term lens, asking yourself what could convince your customers to still engage with the app in two years' time. Evernote, for example, has excelled at both. It has skillfully combined the web and the mobile, and at the same time it has also managed to become a habit for many of its users. It demonstrates that the longer its customers stick around with a free version of an app, the likelier they're going to convert to its premium version."