Analysis of Free Applications, It’s Still Games

Last week, I posted an analysis of the top paid applications on the iTunes App Store. Games and entertainment were the dominant types of applications, commanding the lions share of the top paid spots. This post will cover some of the same ground, but taking a look at the top free applications. Will games and entertainment dominate free applications as well? Read on to find out…

Share of Top Free Applications

As far as simple percentages, Games and Entertainment also dominate the free applications on the app store, games accounting for 39% of the top free applications. Interestingly, music falls out of the top 5 and into the also ran category. New entrants at the top? Social networking, Sports, and Utilities.

Comparing this to the paid applications, a couple of things jump out. First, while games are still the top player in this list, to a much lower degree than the paid applications (in which games were a full 50% of the apps on the list). Second, the top categories are less dominant, with the top three categories of applications accounting for 61% of the applications on the list (compared to 75% of paid applications). Just as you’d expect, users are more experimental with applications that are free, with a much greater of diversity of application types making up the top free applications.

Weighted Share of Top Applications

I weighted the applications to reflect the fact that applications at the top of the list are more valuable than the applications further down the list. Taking this weighting into account, Games and Sports are the only categories that change their percentages, with Games getting 3 more percentage points and Sports getting 1. The rest of the categories are either unchanged or drop by a point. 

Top Publishers, Weighted

So who are the top publishers of free applications today? The below is the list of the top 10 free application publishers, based upon the weighted score of the applications that they’ve published.

Rank	Publisher	# Apps	Score	Category
1	MobilityWare	4	240	Games, Productivity
2	Jirbo, Inc.	4	231	Games
3	SGN	2	224	Games
4	TheMacBox	2	179	Entertainment
5	Sputnik Games	2	163	Games
6	AOL	2	143	Social Networking
7	Plusmo, Inc.	2	118	Sports
8	Glu	1	117	Games
9	Tweakersoft	1	116	Utilities
10	i.TV	1	115	Entertainment

Games companies dominate the list of top free application publishers, just as they did for paid applications. It gets more interesting when you mix the list of top free and paid application publishers, which lets you see the top application publishers across all categories of applications.

Type	Rank	Publisher	# Apps	Score	Category
Paid	1	Pangea Software, Inc.	4	392	Games
Paid	2	Freeverse, Inc.	3	287	Games, Entertainment, Music
Free	3	MobilityWare	4	240	Games, Productivity
Free	4	Jirbo, Inc.	4	231	Games
Free	5	SGN	2	224	Games
Paid	6	Electronic Arts	3	195	Games
Free	7	TheMacBox	2	179	Entertainment
Free	8	Sputnik Games	2	163	Games
Free	9	AOL	2	143	Social Networking
Paid	10	Hottrix	2	140	Entertainment

The top two positions are held by publishers selling applications and 4 of the top ten publishers sell applications.

Thoughts

1. Casual entertainment usage is the dominant category of free applications for the iPhone, but Social Networking is another important category of free application. The iPhone looks more like an entertainment and social networking device if you look at the types of free applications that are popular with users.
2. Users will pay money for applications. Paid application publishers are some of the most dominant, most likely because they are producing valuable content and games.

Comments

[Ben Frueh]

Great analysis Charles.

I believe iPhone application demographics (games, entertainment, social networking, no cost/low cost) are driven heavily by business models available to application developers. Today, those options are limited:

1) Free iPhone apps that drive adoption / market share and complement other revenue streams, e.g. Facebook,
2) Low-cost app that consumers are willing to purchase sight-unseen based only on user feedback, e.g. a sound recorder
3) Higher cost apps that are mobile versions of things users already use in another medium, e.g. a surgical reference

Until Apple provides the mechanism to offer even the venerable 30 day trial, higher priced, higher quality applications offered by small ISVs will struggle. Apple seeks to maximize Apple's revenue. It is in their best interest to offer a business model that sells 50 million $5 apps rather 10 million $20 apps (much to the detriment of the application developer delivering $20 worth of value).

Will Jobs and Apple relax their grip and offer more flexible options? I hope for consumers' sake (and ultimately the iPhone's) the answer is yes.

[Charles Teague]

I couldn't agree more- the limitations of the store basically reward trivial and casual applications.

I am still trying to sort out if this is 'By Design'? Standard carrier distribution enabled try/buy and subscription style business models for their apps, so I am optimistic that Apple will follow suit with time. Android is likely to support all kinds of models, so that will be yet another input into the whole thing. We can all learn from what works there.

-c