Fiksu: iPhone app downloads slip after Apple halts incentivized installs

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Free iPhone application downloads declined in July 2011, a drop that corresponds with Apple's (NASDAQ:AAPL) recent crackdown on iOS applications that offer incentives--e.g., virtual currency--to encourage consumers to download other apps, according to new data published by mobile app user acquisition platform Fiksu.

Click here to see the charts from the Fiksu study.

After analyzing the aggregate volume of downloads per day achieved by the top 200 free iPhone apps in the U.S. App Store last month, Fiksu reports that downloads dropped to 4.25 million per day in July, down from 4.505 million a day in June. At the same time, Fiksu's Cost per Loyal User Index--which measures the costs facing brands who proactively market their apps in an attempt to attract loyal users (defined as consumers who open an app three times or more)--slipped 5.5 percent in July to $1.20, its first decline following four months of increases.

"For many app marketers, July was the first month without the ability to use incentivized download promotions," Fiksu stated. "Many are starting to reallocate their budgets into other campaigns, which may not have the 'immediate gratification' effect of bulk-buying downloads to achieve rank, but which delivers higher loyal user conversion rates at a lower net cost."

Incentivized app installs were once viewed as a reliable launching pad into the App Store's coveted Top Apps countdown, enabling developers to create visibility and demand for their newest releases by promoting their efforts via existing iOS favorites. Apple began cracking down on incentivized iOS apps in late April, contending that the concept violates section 3.10 of its App Store Review Guidelines, which states "Developers who attempt to manipulate or cheat the user reviews or chart ranking in the App Store with fake or paid reviews, or any other inappropriate methods will be removed from the iOS Developer Program."

Soon after, monetization and distribution platform Tapjoy reported Apple's move is dramatically impacting iOS developer revenues and customer relations. After surveying 496 iOS developers, Tapjoy found that two thirds of respondents credited the pay-per-install model for generating 20 percent of revenues, with some saying PPI revenues accounted for more than 60 percent of their earnings. Almost half of developers also reported an increase in user complaints concerning the absence of options to earn in-game currency by installing or engaging with other apps, with 25 percent indicating they are receiving "way too many" user gripes.

For more:
- read this Fiksu Blog entry

Related articles:
Tapjoy: Developer revenues nosedive after Apple bans pay-per-install apps
Apple clamps down on pay-per-install iOS apps
Apple rolls out App Store subscription plans
In-app purchases overtake mobile ad revenues on iOS
Lawmakers urge FTC to probe iPhone in-app purchases

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