iPhone 5 Launch and Christmas: For Apps, The Most Wonderful Times of the Year
Like all its predecessors, the newest Apple iPhone 5 is set to make waves in the app industry. In America alone, iPhone 5 preorders topped 2 million in 24 hours — more than double the amount of preorders it had for the iPhone 4S. Apple is known for impeccably timing its execution for big product launches and upon reflecting on the importance of timing, we’ve noticed how seasonal trends play a big role in boosting app downloads and sales. We can’t stress enough to developers how critical it is to be prepared for the Winter holiday season this year because its going to be huge!
Like the increase of sales for ice-cream in summer and ski gear in winter, mobile app downloads are also subject to seasonal fluctuations. However unlike the weather, app seasonality is controlled by the Master of the iTunes App Store universe – Apple. To analyze these trends, we studied downloads and revenue across the iPhone in the U.S. market1 and discovered some common themes.
iPhone Device releases make apps go hyper
The first boost to Apple app downloads is of course the release of next generation iDevices. On September 12th, Apple CEO Tim Cook recently unveiled the longer, sleeker, more advanced iPhone 5 to the world. Apple addicted consumers will camp and line outside Apple flagship stores for days in order to grab the first release of coveted devices. When the iPhone 4S was released in October 2011, downloads grew a modest 2% between October to November but revenues jumped by a strong 22%. This higher revenue than downloads growth trend signals how iPhone users are comfortable with spending more and more on apps.
Christmas is a merry time for apps
The second sharp rise in Apple app downloads and revenues is clearly around Christmas time. Christmas or the end of the year is a time for giving lavishly and Apple devices are on many people’s wish lists. One of the most successful developers in the world, Rovio of Angry Birds, took advantage of the Christmas trend with a special Angry Birds Christmas edition in 2010 and on Christmas Day of 2011 alone, there were 6.5 million downloads across all of its games.
In relation to the app market, we classify the Christmas period being from November to January, since November to December is when device sales increase and December to January is when app downloads and sales related to those devices sales flow through.
To see the incline and decline before and after the Christmas period, we zoomed in on the period from September 2011 to February 2012 for app downloads and revenue for iPhone in the U.S. market.
As expected, there was a marked uptick in app downloads from November to December of 39% and a related 45% jump in revenues. At the tail end of the Christmas period there was a decline of 14% in downloads and 7.1% in revenue. For iPhone developers, it is important to capitalize on the Christmas spike by preparing to release and market apps in October.
Of course the natural dips in downloads and revenues occur in-between the peaks of device releases and Christmas time. Like many other industries, the after-holiday period takes a while to wind back up to full capacity. That is why it is important for developers not to arrive at the party too late, because once February comes, app downloads and revenue will drop off suddenly.
Know the seasonal trends and get ready for them
Knowing that device releases and Christmas are two factors that consistently influence apps, app developers, publishers and marketers must prepare to take advantage of the natural trends. One strategy is to create Christmas themed games like Rovio with Angry Birds. Another strategy may be to get featured in the ads of the newest iPhone release. To investigate the impact of the hotly anticipated iPhone 5’s market debut, we will follow up later with analysis of iPhone 5 app download and revenue trends in the coming months. For now, everyone in the app world should prepare for the Christmas and Winter burst of activity because we don’t want to say ‘We told you so!’
Notes:
1. All data The analyses and insights discussed were drawn from App Annie’s Intelligence data for the U.S. market. App Annie takes responsibility for the claims and insights in this article which are based on this data and research. However, App Annie does not take responsibility for any actions or outcomes undertaken by 3rd parties, as a result of this article or the analyses or data contained within.