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Study Suggests 70 Percent of Mobile App Users Pay “Nothing or Very Little” For Apps

A recent study conducted by ABI Research notes that 70 percent of mobile app users spend “either nothing or very little” on mobile applications. ABI’s study suggests that the mobile application market relies heavily on big spenders as opposed to casual consumers. The highest spending three percent of all app users account for about 20 percent of the mobile app market.

It isn’t that the bulk of app users are against spending money on apps. Approximately two-thirds of app users have spent money on an application on at least one occasion. “The median amount among the consumers who spend money on apps is much lower than the average, just $7.50 per month,” ABI¬†Senior analyst Aapo Markkanen explained. “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 average paying user spent just $14 per month on apps.

It’s too early to determine if these findings will slow down the major market surge in mobile app development. The ongoing big spender effect has allowed for some sustainability for gaming and enterprise apps, which generate the most revenue. Will these trends continue? Or, as mobile devices¬†improve, will consumers shift their focus to an improved mobile web browsing experience instead?

“First, don’t get obsessed by mobile and apps, but remember also the web,” Markkanen said. “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.”

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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.”

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Mark Hearn

Mark Hearn is a nerd's nerd if ever such a thing existed. Covering the mobile scene for several years, he also has a love for film, sports, gaming...Mark Hearn is a nerd's nerd if ever such a thing existed. Covering the mobile scene for several years, he also has a love for film, sports, gaming...


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