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Fiksu Indexes Show Free iPhone App Downloads Are Decreasing While Acquisition Costs Increase

Fiksu has released its latest Indexes tracking how much it costs for brands to acquire loyal users, and how many downloads the top free iPhone apps are getting.

The Fiksu App Store Competitive Index tracks the average combined volume of the top 200 free iPhone apps. For July, the Index indicates that daily downloads decreased month-over-month by 5.6%, down to 4.37 million downloads from 4.63 million in June. The number has remained relatively stable after a drop from 6.35 million in February. This may be due to a residual after-effect of the holiday season, which saw steady increases after the launch of the iPhone 4S.

The Cost Per Loyal User Index tracks how much it costs “for brands who proactively market their apps” to acquire a “loyal user” – defined by a user that opens up an app 3 or more times. The July average increased by 7% to $1.54 after an average cost of $1.44 in June. This is the highest average cost in 2012, and the highest average since December 2011’s $1.81 figure.

Why are these numbers going in opposite directions? The average daily downloads may be due to people using their phones less after the holiday rush, which appeared to have an effect on downloads for 2 months. There’s also the possibility that some kind of change on Apple’s end with allowed methods for driving app installations affected the numbers. The Competitive Index charts out just the free iPhone download numbers, so while the 3rd generation iPad released in March, it seems unlikely that its release caused the massive drop, especially as holiday iPad sales also have to be factored in.

Interestingly, charting out the numbers shows that the two Indexes don’t have much correlation. For the past 9 months, as the Competitive Index increases, the Loyal User Index tends to decrease, but the correlation is very small, with many outliers in the data (the coefficient is -.1262, specifically), such as the July data where the Index decreased but costs went up. So each Index should best be taken individually.

It remains to see that with the next iPhone rumored to be announced in September or October, how each Index will react. Will free downloads spike again? If so, will it be easier to acquire loyal users? Time will tell, especially with so many external factors potentially impacting each Index.

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Carter Dotson
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