This document provides an overview of the app store business model and case studies on mobile app marketing. It includes facts about smartphone usage and operating system market shares globally and in various countries. It also outlines the differences between the App Store and Android Market business models, including their pricing structures and how much of app downloads and revenues come from paid vs free apps. The document concludes with two case studies on apps that saw increased downloads after an update was released and when the app price was dropped.

1. THE APPSTORE BUSINESS MODEL:
A SURVEY WITH CASE STUDIES
Niccolò Feroci, University of Florence – 2012 Graduate
Simone Guercini, Full Professor of Business Economy
at the University of Florence
in collaboration with

2. FOREWORD
This presentation is delivered by iStartApp in
collaboration with the University of Florence.
It provides a summary of Niccolò Feroci’s
Bachelor Thesis Work on
"Mobile AppMarketing: Actors and Products"
This content is made available for the
general public. We hope it can provide useful
information for further studies on this vast
and fast-moving market.

3. FACTS:
In 2011, for the
first time, more
45% of global smartphones
territory than basic
covered by phones sold in
5.9 billions broadband the USA
activated sim network (159
cards, 1.2 countries)
billions with
mobile-web
support
Source: International Telecommunication Union

4. FACTS:
Smartphones Shipped Wordlwide with 2013 Forecast (MLN) 820
900
800 656
700
600 488
500
400 303
300 140 173
200 77 115
50
100
0
2005 2006 2007 2008 2009 2010 2011 2012 2013
Annual Shipments – estimates for 2012 and 2013 - source: Gartner; IDC.
2011:
WORLD SMARTPHONE
OS MARKET
52%
17%
iOS Android
Operating System market share. Source: Gartner; IDC; Startegy Analytics

5. FACTS:
2011: 2011:
USA SMARTPHONE OS EU SMARTPHONE OS
55% 32%
23%
27%
iOS Android iOS Android
Source: Nielsen Company

6. EU: China: USA: Japan:
AppStore
vs 369 mln 12 mln 421 mln 43 mln
Android Android Android Android
Android
Market 346 mln 178 mln 430 mln 83 mln
AppStore AppStore AppStore AppStore
January 2012 Downloads
Source: Xyologic Mobile Analysis

7. Most Innovative Companies :
Ranking/ 2010 2009 2008 2007 2006
Company
Apple 1 1 1 1 1
Google 2 2 2 2 2
Microsoft 3 4 5 5 5
IBM 4 6 12 9 10
Amazon 6 11 11 20 21
LG electrics 7 27 NP 49 85
Sony 10 14 9 10 14
source: Business Week

8. As of 2011:
AppStore Android Market
About 20% of
96% of
total app
downloads
downloaded
were free apps
were paid apps
More than 60% 70% of total
of paid apps apps available
costed $0.99 were free
21% of total
32% of total
app downloads
app downloads
were utility, vs
were games
6% of Appstore
Source: www.chomp.com

9. Mobile
Advertising
eCPM
$ 1.3 $ 1.7
Japan:
Fill Rate
85% 78%
Japan:
CTR
1.1% 2.3%
Japan:
Source: blog.inner-active.com

10. AppStore
marketing

11. AppStore marketing
 High expectation among the users
 High-end target
 More than 500000 apps available
Tough competition

12. Business model
 Free app
 Pay app
• pay per download
• daily or weekly payment
• freemium

13. Good practice for design and marketing
usability functionality
entertainment promotion

14. Marketing and communication
• Only one store
• more than 500000 apps available
• NO advertising on the store
BE CREATIVE
Media Social Networks Go global

15. Pricing
Fixed tires : free, $0.99 , $1.99, $.2.99 ...
Exchange rate fixed and controlled by
Apple
Price can be changed anytime
Freemium model generates 72% of
total revenues of paid apps

16. Milestones for app success
solid content
smart keywords choice
(usability, functionality, entertainment)
regular updates price drops

17. Search results:
iOs
Android
14%
19%
function function
search search
name name
search search
86% 81%

18. CASE STUDIES
in collaboration with iStartApp

19. FileXChange
released
24 April 2011
category:
business

20. FileXChange: update effect
Significant peak after
Update the first update release
DOWNLOADS
Month
average
DATES

21. SpeakNotes
released
24 April 2011
category:
business

22. SpeakNotes: price drop effect
Price Significant peak after
drop halving the price from
$1.99 to $0.99
DOWNLOADS
Month
average
DATES

23. Acknowledgements
Giuliana Scillia
Niccolo’ Tosi
Giorgia Taurino
Ilaria Esposito
Contacts
info@istartapp.com
www.istartapp.com