The full force of the iPhone 6 and 6 Plus and the debut of iOS 8 made itself felt last month, with a 42 percent surge in iOS downloads in October over the previous month. The news comes courtesy of Fiksu, a mobile marketing technology company, whose indexes measure monthly fluctuations in competition for rank in the Apple App Store and the cost to acquire loyal users.
October represented an all-time high of 7.8 million app downloads for its App Store Competitive Index, a 39 percent year-on-year increase, according to Fiksu. The index tracks the aggregate volume of downloads per day achieved by the top 200 ranked free iPhone apps in the U.S. Fiksu reported that the spike in activity was driven by the unprecedented popularity of the iPhone 6, with millions of users loading up their new devices with apps.
More Downloads, but Rising Costs
Competition among developers, however, remained high, with the costs of acquiring new users increasing substantially. According to Fiksu’s Cost per App Launch Index, which tracks the cost of each repeat app launch over time, the cost to launch an app for iOS increased 24 percent in October to $0.26, or a year-on-year increase of 39 percent. That is significantly higher than the index for Android, which is only $0.10.
Fiksu’s Cost per Install Index, meanwhile, also saw a major jump of 21 percent month-on-month and 59 percent year-on-year to reach $1.46. This substantial jump in costs demonstrates a marked growth in competition this year as advertising dollars continue to flow into mobile, according to Fiksu.
“While recent indexes have shown a steady stream of escalating costs, the October index numbers validate another important trend: the increasing importance of apps to consumers,” said Micah Adler, CEO of Fiksu, in a company press release. “Mobile marketers must start thinking strategically about their marketing tactics over the longer term and figure out how to use apps to connect with customers.”
Developers are hoping that the upcoming holiday season will give rise to another wave of app downloads, helping to lower marketing costs per install for the year. But as more and larger players have entered the field, sometimes bringing massive advertising budgets with them, those costs have only grown over time.
The Importance of Loyalty
Despite heavy competition between developers in October, prices fell slightly in a least one category. Fiksu’s Cost per Loyal User Index saw a slight decline for the month from $2.25 to $2.16, as users were quick to re-download the apps they considered most vital to their new handsets.
Because loyal users drive down the marketing costs for app installations, Fiksu said the recent data reflect the importance of developing strong customer loyalty for app developers.
Fiksu’s numbers are significant not just for app developers, but also for Apple. If the number of app downloads is representative of the number of new handsets the company has sold, a 39 percent increase year-on-year would suggest Apple is on track to sell around 70 million iOS 8 devices this quarter, beating previous records for the company by a long shot.