Dropping the price of your app in the App Store can be an effective method of gaining interest and getting a short term revenue boost, a new study has found.
In its latest report, mobile app analytics firm Distimo took a look at the effect of price changes on mobile software. Their data found that a total of 850 unique iPhone applications, and 930 iPad applications, changed their price at least once in the month of December.
The data found that price changes have a much larger effect on iPhone apps than on their iPad brethren. The study showed that downloads of iPhone apps increased by 1,665% five days after a price cut, while iPad software downloads grew by 871%.
“There is a two-fold explanation for this lagged revenue growth effect: either an increase in income from one-off fees or an increase in income generated by in-app purchases,” Distimo explained.
Taking a route in the opposite direction, that of increasing prices, caused cumulative downloads to drop by 46% over five days on the iPhone, and 57% after five days on the iPad.
