In a blog post put together by the mobile analytics firm Flurry, the company takes a look at pricing on the App Store and comes away with some interesting results.
By analyzing mobile analytics across 350,000 apps and covering a time frame of four years, Flurry found that the percentage of apps available for free has risen steadily since 2010.
Today, 90 percent of apps are available for free while 6 percent are available for just US$0.99. Compare that to 2011 when 80 percent of apps were free and 15 percent of apps were available for $0.99.
Flurry attributes the percentage increase of free apps to the fact that customers "want free content more than they want to avoid ads or to have the absolute highest quality content possible."
That sentiment undoubtedly rings true for many users. As a personal example, I'm still rockin' the free version of Words With Friends because the ads aren't yet obtrusive enough as to persuade me to pay for the full ad-free version.
I also think that the higher percentage of free apps on the App Store may be the result of developers figuring out that, in the long run, there may be a lot more money to be made via the freemium model of app pricing.
While getting users to pay $0.99 or $1.99 for an app may bolster revenue right off the bat, a look at Apple's listing of the top grossing iPhone and iPad apps suggests that, in the long run, it's a wiser business move to offer an app for free, accumulate a large userbase and then up-sell consumers with either ad-free software, subscriptions or typically lucrative in-app purchases.
Of the 25 top-grossing iPhone apps, for example, all but one are free. The same statistic holds true for the iPad as well.
Not surprisingly, as the percentage of free iPhone apps continues to grow, the average cost of an app on the App Store is going down.
Flurry found that the average cost of an iPhone app is now $0.19 while the average cost of an iPad app is $0.50. By way of contrast, the average cost of an Android app is $0.06.
These results also support another belief derived from surveys and some transaction data: iPad users tend to be bigger spenders than owners of other devices, including iPhone. On average, the price of iPad apps in use in April of this year was more than 2.5 times that of iPhone apps and more than 8 times that of Android apps. This is likely to be at least partly attributable to the fact that on average iPad owners have higher incomes than owners of other devices.
Also interesting is that Flurry found that developers over the past few years are increasingly engaging in price experimentation wherein they make apps that were once pay-to-play available for free.