App Store number crunching - The 0.99c model generates more revenue than premium apps

The latest Distimo report is out and this time it brings us some interesting comparisons between the Mac, iPhone and iPad App Stores. In a nutshell, it highlights something that should be obvious for consumers but no so easy to digest for developers. Despite the launch of the Mac App Store two months ago, desktop apps continue to have a higher selling price point, followed by iPad apps and the cheaper iPhone offerings. According to the report, the apps on the top 300 lists in the US have an average price of $11.21, $4.19 and $1.57, which sounds to me more like a 0.99c economy we all know. 

 Via lilszeto

What seems very clear is that compared with the competitor app stores including WP7, Palm, Nokia, Android and RIM, the iPhone App Store continues to be the biggest app resource with more content with 314,644 applications and counting. Despite Steve Jobs' criticism to the Android Market and the amount of apps optimized for Honeycomb OS, the Google repository comes in next with a huge difference compared to the number of iPad-specific apps.

The top applications on iPhone generate 2.1 times the revenue of top applications on the iPad. The top paid applications on the iPad in turn generate 2.0 times the revenue of top paid applications in the Mac App Store.

These figures make me wonder how the mobile development is going to react in the year of the tablets. With an increased user base - see reports of 70% of iPad 2 being sold to new customers, and the amount of sales and launches in the iPad App Store, I'm confident that this can change. Right now, the "low" amount of apps available for the iPad should make discovery a minor problem, but in recent days we have seen the big studios pretty much giving away their apps for the same low price iPhone users are expecting to pay. The long tail in the app business means that the amount of developers making decent money on the App Store is seriously small. If we get into a situation where the most downloaded apps are priced low, iPad apps will start to be perceived as a low value investment for consumers and developers.

Rough interpretation of the App Store economy. iPad apps are making twice as much.

Those suggesting that launching on the iPad store exclusively is not a good move might be wrong. Again, the top 300 iPhone apps in the US were downloaded 5.6 times more than its iPad counterparts. The pricing strategy still means that iPad apps fared better, generating at least twice the revenue of iPhone apps. Sounds logic? Well, the 0.99c model pushes number of downloads dramatically, which is crucial to get the first spots on this long tail. You get a higher return with your iPad app on average, but the real money is in the first spots of the iPhone App Store… for now. Do you think iPad apps will continue to be sold at a premium price? What can be considered premium anyway? $4.99-$9.99? Let me know.