New Data Suggests App Stores Are Getting "Full"

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The new App economy may be close to getting saturated, if new data from the App stores is to be believed. Distomo, a company that tracks App store analytics, released a new report yesterday that suggests that the App markets may be starting to get "full".

With over 700K apps each, the iTunes and Android marketplaces are already crowded, but it was possible for a new app to get to the top of the charts. If the App was well made, had a decent marketing budget and solved a real problem, it could become a top seller. Indie developers could get into the top of the charts had have a reasonable chance of making money in the process.

The new data suggests that it is becoming increasingly harder for new Apps to get to the top of the App stores. According to the report, only 2% of the top-250 Apps on the iOS store were created by new developers, while the number is 3% for the Android Play store. While getting discovered in the App store was already a challenge, it is somewhat worrying that the existing top developers have started to get a grip on the top Apps.

Virtuous vs Vicious

This is not entirely unexpected. As I've previously argued, existing top developers on the App stores have a great advantage when launching new Apps. They not only have more marketing budget, but have additional channels like App referrals and offering new goodies to users to download their Apps. And once their new Apps are in the top lists, the organic downloads rise, making back the money spent on marketing. This "virtuous cycle" is what is keeping the top App developers on top.

More interestingly, it seems like new developers are trying harder and harder to win over with their Apps, at huge costs. A new developer on the Android Play store on average released SIX free apps, none of which were likely to make it to the top lists. By releasing more and more free Apps, new developers are increasing the crowding in the marketplace, making it even harder for their next App to get discovered. According to the report, new publishers had only about 1.2% of the revenue share on the Play market. For iOS, it's worse at 0.35%. This "vicious cycle" is what is making it hard for new App developers to break into the top.

While the news is not good for new App developers, the fundamentals still seem to be strong. The App stores are still the best bet for a new and innovative App to get discovered and monetized, but the competition is very intense. Innovation is needed not just in the App itself, but in also in the marketing and distribution side of things.

Source: Distimo Report

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