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Summary:

Update: Thanks to everyone for weighing in about the infographic. The data used was given to us on an exclusive basis from analytics firm Flurry. Indeed, three-quarters of the apps in the App Store are “paid apps,” which was used to calculate the average app price […]

Update: Thanks to everyone for weighing in about the infographic. The data used was given to us on an exclusive basis from analytics firm Flurry. Indeed, three-quarters of the apps in the App Store are “paid apps,” which was used to calculate the average app price and the subsequent revenue figures in the previous version. However, only one-quarter of the apps actually downloaded are “paid apps,” so the average price per transaction (paid + free downloads) is actually much lower than the average app price in the store. The graphic has been updated to reflect this price. Also, some of the averages in the Flurry data were calculated using projected user numbers from the first quarter 2010; that has been corrected to reflect only data up to the end of the year.

For clarification purposes, here is the math:

According to Flurry, Average listed price of a paid app: $3.63

74% of apps listed in the app store are paid.
Average listed price of an app (including free): 3.63 x .74 = 2.70 (with rounding)

Only 1/4 of downloaded apps are paid.
Average price paid for  an app (including free): 3.63 X .25 = .91

While we make every effort to ensure the accuracy of all the information contained in our posts, sometimes errors make their way onto our site, and this was one of them. We deeply regret any confusion this may have caused. Please accept our apologies.

best, Om

Related GigaOM Pro Research Report: Surveying the Mobile App Store Landscape

Graphic courtesy of Column Five Media

By Edit Staff

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  1. Wow! what a great way of showing the potential, well done! You guys should check out http://www.appboy.com too they have done a great job of helping developers get discovered.

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  2. And thats why we created http://www.appboy.com, the social network for App Developers and Users. There is so much potential here, Awesome post Guys!

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  3. I really loved the data and the display of this report! Thanks for being so cool.

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  4. Vijay Adusumilli Tuesday, January 12, 2010

    Sorry, I am missing something here. Are users dowloading 3.7 paid or total number of applications per month? If it is the former, then total number of downloads (4 times paid) for December are 3.7x4x56M = 828.8 million. Towards end of September Apple announced 2 billion downloads and on Jan 5th Apple announced 3 billion downloads. If about 830 million of them were downloaded in December alone, App Store must have really had a very dry period in October and November. What am I missing here?

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    1. I am missing something too. Using the data above, the average paid apps cost $2.59. If 75% are free then the average including free would be closer to $0.65, correct?

      So the average iPhone user would spend closer to $2.40/month than $10.

      Showing my work!:

      .9925+1.996+2.998+3.991+4.993+5.992+6.99*4+9.99=129.5

      25+6+8+1+3+2+4+1=50

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      1. I think you’re right!

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      2. i was thinking the same exact thing..

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      3. Stupid Irishman Wednesday, January 13, 2010

        The average paid app does NOT cost $2.59!!!! Your statement implies you mean for ALL PAID APPS. You read it wrong. In DECEMBER, The average price of apps in the “Top 50 Paid Apps” section just happen to be $2.59.

        75% of apps are NOT FREE, but 75% of apps downloaded in December happened to be free.

        You had to have failed the whole word problem thing back in school, right?

        Why did you show your work? All you did was come one step shy of showing what they quoted (129.5/50= $2.59- the average)

        Could you please submit all work showing how you arrived at $2.40 per month? I want to include it in my next board meeting. Thanks.

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      4. Stupid Irishman Wednesday, January 13, 2010

        OMG!!!! I just realized that you were even more wrong than I had previously imagined.

        The “one quarter” figure (and it’s inverse, naturally) is in no way related to the $2.59 pricing figure. Multiplying them together gives you nothing more than headache. Did you actually read the piece?

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      5. Om, Sincere thanks for taking the time to make corrections to the data. Solid info-graphic. Brand win.

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      6. Dear Stupid Irishman,

        The figure of $2.40/month came from multiplying the number of apps users downloaded in a month by the average cost of an app, which is the average cost of a paid app multiplied by the percentage of downloaded apps that are not free. It is the same math that Om walks through in the update above. The exact numbers are slightly different because the original data provided by the info-graphic was different. The math is the same.

        Why did they go to the trouble to change it those of us who suggested the update are all idiots, failing the whole word problem thing back in school, and OMG this and Cheeto that? STFU.

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      7. haha your both wrong

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    2. I would assume total.

      To quote the above, “iPhone users downloaded an average of 3.7 apps in December, one quarter of which were paid.”

      Of course, the interesting part is that one quarter of 3.7 is 0.925. We’ll be nice and round that up to 1. So everybody bought an App in December. They spend $10 a month, but the average price for an App is $2.70?

      I think we might need to consider not using “averages” here. I’d love to see what the deviation is. We might want to consider using a mean or median. Do we have 1% of the customers downloading everything that’s not nailed down and the other 99% downloading very little?

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      1. Stupid Irishman Wednesday, January 13, 2010

        Peter- you sound like a smart dude. Let me run this by you:

        First, the $10 figure is meta-data- all months averaged for all consumers of all app store products.

        Second, the average price quoted in the piece was only for what was in the “Top 50 Paid Apps” section of the itunes app store (it was quoted as $2.59, not $2.70).

        Why would you draw a correlation between two disparate phenomena? Also- what does deviation do for you in this story? All they are trying to do is show how kick-butt and popular the technology is. What’s the big deal?

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    3. 3.7 apps rounded up to 4
      $2.56 per app rounded up to $2.6
      comes to a grand total of
      $10.4 rounded down to $10

      The problem here is that the math continues on with all four of the apps being paid, and not just the one.

      The proper math would be:
      125 Million in Revenue Each Moth with
      37.5 Million to Apple (30%)
      87.5 Million to Developers (70%)
      $1,500,000,000 Each Year on iPhone Apps

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      1. I think you’re in the right ballpark.

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      2. Stupid Irishman Wednesday, January 13, 2010

        Thanks for not helping.

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      3. Good math but remember your pick December as your base month, not a good prediction of your full year. All those iTunes gift cards in stockings might be tilting the table.

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    4. Your point may be absolutely right, but I would like to see the forest here rather than trees.

      With due respect, by the time your calcs get done, the #s change. So the larger point is apple makes apprx $150 revenue/month ($500M x 30%). Take costs out and lets say they make (profits( of $100M/month = $1.2B/year + growth. Very decent #s – almost needle moving in the grand scale of things + incredible platform stickiness (both for users + devs). Thats the point.

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      1. Stupid Irishman Wednesday, January 13, 2010

        BAM! You’ve got it, dude. (except for your agreeing with VJ- he was way screwy in his… quote)

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    5. Stupid Irishman Wednesday, January 13, 2010

      Vijay:
      Calm down, big boy. Yes- you are missing something- alot of somethings, actually. Your assumptions are all wrong, so you are making gobs of mistakes in your calculation. Who gives a crap, anyway, though??? And why did you start off by apologizing? That was as weird as my fascination with wanting to reply to you, I guess.

      Anyway… I’ll point out the err in your calculation after I point out the first obvious mistake on your part- to use these facts/figures for anything other than what they were meant for: To demonstrate that smartphones are a prolific technology… and maybe that people at Apple think they are really smart marketers.

      Listen, Vij- I’m worried about you over here. Take a rest on trying to figure out Apple’s revenue or total download figures or whatever. You sound like some kind of freaked-out conspiracy theorist trying to uncover the next great insider trading scam. You have poor Frioga flippin’ out over her calculator, too! (Sorry, Frioga- I had to say something)

      Here goes…

      IN DECEMBER, ONLY:
      – Of all of the dipsticks who downloaded Apps (not all Apple customers who have ever downloaded an app- JUST the December dipsticks), they averaged 3.7 apps per dipstick.
      – They never reported how many dipsticks there actually were in December, so stop trying to guess at it.
      – Using a multiplier of 4 to reverse the “one quarter” figure makes you a dipstick, too, by the way.
      – The quarter figure was meant by author to apply to the 3.7 figure. Meaning this: Every dipstick in December who downloaded 3.7 apps downloaded 2.78 free apps and .92 paid apps. Now do you see why multiplying 3.7 by 4 is really stupid and irrelevant? Hope so…
      – The 56M figure is a TOTAL CUSTOMERS of the appstore since the biginning of appstore time. Again- they never reported quantity of December-only customers. This is your largest calculation mistake: combining facts/figures that aren’t related to each other. You are making me feel like a complete NERD in having to explain this to you… and now I’m starting to feel idiotic for even entertaining your question. (DAMN my obsessive-compulsive need to correct idiots) :-(
      – The billions of downloads figure (though never reported in this piece, but since you referenced it, and it feels fun to explain… I will). This number you read about in the National Inquirer refers to the number of TOTAL APP DOWNLOADS since they started offering app downloads a year and a half ago.
      – I am so PISSED that I spent all of this time replying to you. Please don’t ask any more questions so I don’t get sucked in.

      p.s.- Frioga got it all wrong, too, so don’t feel bad.

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  5. [...] much impact are we talking about? This awesome info-graphic at GigaOm sums it up quite nicely with numbers ranging from the average application approval time, the [...]

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  6. [...] app is $2.70 or that the average iPhone owner spends $10 a month on apps? GigaOm has put together a snazzy infographic breaking down the economy of the App Store with dozens of tasty morsels of [...]

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  7. [...] much impact are we talking about? This awesome info-graphic at GigaOm sums it up quite nicely with numbers ranging from the average application approval time, the [...]

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  8. [...] 13-1-2010] Giga Om’s TheApple App Store Economy provides sales figures for December 2009 that suggest the iPhone/iTouch’s 56 million + users [...]

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  9. Please note that we have updated both the average cost and subsequent revenue generation figures.

    thanks, best, Carolyn

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    1. Stupid Irishman Wednesday, January 13, 2010

      Stellar piece, Carolyn.

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  10. Awesome article, great image, and great research. The apple app store is definitely in huge demand right now. Its going to be interesting to watch to grow even more in the future! Also check out http://www.PhoneFreelancer if you have an app idea, its a website connecting entrepreneurs with iphone developers, for free.

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