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When iPhone Apps Are Reduced In Price, Sales Go Up 22%

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Apr 12, 2001
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In what seems like a logical result of economic pricing strategies, iPhone app developers who put their apps on sale see an average increase in revenue of 41% on the first day, and total increases of 22% after 15 days. App store analytics provider Distimo shared the findings in a new research report.

TechCrunch writes:
When a developer decides to put an application on sale, there's a delicate balance that has to be achieved. The sale price has to be low enough to encourage more downloads, obviously, but it also needs to be low enough that it encourages enough download volume to make up for the lost revenue.

To examine what happens during when apps go on sale, Distimo examined the 100 top grossing apps in the iPhone App Atore, iPad App Store and Android Market. On the first day of the sale, the average revenue increase by +41% in the iPhone App Store, and by 15 days in, was up by +22%. On the iPad App Store, the day one effect was even greater: up +52% on day one and up +19% by day 15.
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4-revenue-effects-of-sale.jpg



All this is well and good, but not all developers see such impressive results. 44% of iPhone apps lose revenue during the sale, with 23% of devs seeing a drop in revenue of more than 20%. In general, offering a small discount from $7.99 to $6.99 doesn't increase revenue as much as a larger drop from $7.99 to $4.99.

The full report from Distimo goes into much greater detail, with additional details about average app pricing and more information about the impact of different price cuts on revenue.

Article Link: When iPhone Apps Are Reduced In Price, Sales Go Up 22%
 
Article Link
https://www.macrumors.com/2012/01/26/when-iphone-apps-are-reduced-in-price-sales-go-up-22/
So then having one day sales of 25% off is a great idea for increasing revenue, right?

If your app is normally $4 and you normally sell 100 a day, then you make $400 most days.

Drop it to $3 and your sales for a day increase to 140 and you make $420...

Edit: Did the math, looks like a discount of 29% is the break even point for a one day sale... 16% would be the break even point for a 2 week sale.

(BTW, a certain app normally $3 is currently 66% off, just $1, but you're just going to have to guess what I'm referring to because forum rules forbid me from mentioning it outside of the space below a post.)
 
Last edited:
Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_0_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9A406 Safari/7534.48.3)

Also noted - When it's cold, water freezes...
 
I think the only apps that I've purchased in last couple years were because they were on sale. The rest were free downloads. I am not really into the apps so much, rather music. I wish music would go on sale. 50% off an album would be awesome.
 
If the reduction is from $1.99 to $.99, that's a bad deal for the developer though (and for Apple). Much better to sell 22% fewer at 2X the price, no?
 
HiRez said:
If the reduction is from $1.99 to $.99, that's a bad deal for the developer though (and for Apple). Much better to sell 22% fewer at 2X the price, no?
Click to expand...

This just means that developers need to make apps worth $4 normally and put them on for sale for $3 for a one day sale if they want it to work out.
 
and when Amazon has a free app of the Day, that app's sale goes up 999%?

Most are crap, but some are legit ($15 office apps, Sketchbook Mobile)... and it keeps me checking it every day.

Apple should consider something similar.
 
Could someone please make an app to tell me how to price my apps? Please tell me when that app is going to be on sale.

When would an app-pricing app tell itself to go on sale?
 
Fandongo said:
and when Amazon has a free app of the Day, that app's sale goes up 999%?

Most are crap, but some are legit ($15 office apps, Sketchbook Mobile)... and it keeps me checking it every day.

Apple should consider something similar.
Click to expand...

If they do that, they had better NOT do what Amazon got caught doing, giving away developers' (non-free) apps for free as Free App of the Day without their permission, netting the developer $0. That's a way to lose trust with your devs really fast.
 
We have dropped the price by 25% and seen nothing interesting in sales trends, then dropped the price by 50% and seen interesting numbers - for a short period of time.

The biggest problem when you play this game us the perceived value of your app.

If you launch at $4.99 and then drop to $1.99 on sale, what happens when you go back to $4.99? If your app is desirable enough, it keeps selling, but new customers may feel like they overpaid, and are not happy customers at all.

We have also released an app for a low introductory price, missing some planned features, then increased the price when the full feature set was in place. This rewarded early adopters and enabled us to get more real world feedback for the updated version.

Having special sales events - well publicized with clear end dates - can also stimulate impulse buys, but you had better understand your real costs before you sell several thousand copies of your app at a net loss.
 
ArtOfWarfare said:
So then having one day sales of 25% off is a great idea for increasing revenue, right?

If your app is normally $4 and you normally sell 100 a day, then you make $400 most days.

Drop it to $3 and your sales for a day increase to 140 and you make $420...

Edit: Did the math, looks like a discount of 29% is the break even point for a one day sale... 16% would be the break even point for a 2 week sale.

(BTW, a certain app normally $3 is currently 66% off, just $1, but you're just going to have to guess what I'm referring to because forum rules forbid me from mentioning it outside of the space below a post.)
Click to expand...

Apple takes 30% as well.

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Fandongo said:
and when Amazon has a free app of the Day, that app's sale goes up 999%?

Most are crap, but some are legit ($15 office apps, Sketchbook Mobile)... and it keeps me checking it every day.

Apple should consider something similar.
Click to expand...

Well amazon makes the app free without telling the Dev...
 
ArtOfWarfare said:
So then having one day sales of 25% off is a great idea for increasing revenue, right?

If your app is normally $4 and you normally sell 100 a day, then you make $400 most days.

Drop it to $3 and your sales for a day increase to 140 and you make $420...

Edit: Did the math, looks like a discount of 29% is the break even point for a one day sale... 16% would be the break even point for a 2 week sale.

(BTW, a certain app normally $3 is currently 66% off, just $1, but you're just going to have to guess what I'm referring to because forum rules forbid me from mentioning it outside of the space below a post.)
Click to expand...

There needs to be an app that calculates how much and how long to drop the price for, calculates everything for you including factoring in the Apple 30% and auto adjusts your prices up and down on the app store for you ... it could track sales in real time and raise and lower the price to maximize profits. :D

I was joking but now i think about it, isn't that how the stock market is dealt with too? LOL

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Biscuit411 said:
Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_0_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9A406 Safari/7534.48.3)

Also noted - When it's cold, water freezes...
Click to expand...

You forgot to take pressure change into account. ;)
 
Digitalclips said:
There needs to be an app that calculates how much and how long to drop the price for, calculates everything for you including factoring in the Apple 30% and auto adjusts your prices up and down on the app store for you ... it could track sales in real time and raise and lower the price to maximize profits. :D

I was joking but now i think about it, isn't that how the stock market is dealt with too? LOL
Click to expand...

It'd be a pain though (at least for me, I don't have much experience with doing web programming kind of stuff,) to get an app to login to iTunes connect, navigate to the correct page, and then enter the information on a new sale price.

----------


You forgot to take pressure change into account. ;)
Click to expand...

You both forgot about colligative properties.

Demonstration of water freezing "instantly" because of colligative properties:
https://www.youtube.com/watch?v=rzQPRcyxW-4&context=C3b7427bADOEgsToPDskIvihBUHhd-sytwTYOilbVO
 
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