Flurry evaluated download growth driven by Christmas across the leading Apple and Android devices, as well as their respective app stores, pulling a sample that represents approximately 10% of all download volume in the App Store and Android Market.
iPod Touch Downloads Explode on Christmas Day, Surpassing iPhone for the First Time
Flurry revealed the significance of iPod Touch to Apple's future plans in its November Pulse report. Out of the estimated 58 million iPhone and iPod Touch devices in the market at the time, Flurry estimated roughly 40% of those, or 24 million, were iPod Touch devices. It appears that an influx of new iPod Touch devices has flooded the market over Christmas, and that users of the handset, primarily pre-teen and teen audiences, are voracious downloaders. Here are some stats:
- App downloads on iPod Touch soared past iPhone for the first time, eclipsing iPhone downloads by 172%.
- iPod Touch 3G downloads increased by more than 900% on Christmas Day, compared to the average of all previous Fridays in December.
- Total iPod Touch downloads (all generations) jumped by over 1000% on Christmas Day, indicating that in addition to new iPod Touch 3Gs coming into the market, iTunes gift card giving may have driven downloads to older generation iPod Touch devices.
The chart below sets iPhone download volume at "1" for iPhone on Christmas day to allow relative comparisons. All other dates for iPhone and iPod Touch are normalized against this figure. Compared to iPhone app download volumes on Christmas, the iPod Touch exceeded iPhone app downloads by 172%. iPod Touch download volumes increased by nearly 1,000% on Christmas day (which fell on a Friday) compared to the average of all previous Fridays in December. On December 26, iPod Touch download volumes continued to exceed that of iPhone by 104%.
December Shatters App Store Download Records
A month ago, November had set previous download volume records, growing by 15% over October. Toward the end of November, Flurry forecasted that December download volumes in the App Store would exceed November by more than 20%. With the figures in, Flurry underestimated growth by more than half.
*Flurry used December actual tracked downloads through 12/26, and completed the month by using an average daily download figure to estimate 12/27 - 12/31.
- App Store download growth increased by more than 50% in December* over November.
- Android Market Growth increased by over 20% in December* over November.
Droid Leads Android Downloads for Christmas, but Android Market Trailing App Store
Android devices also showed growth during the Holiday season, led by the Motorola Droid.
- Droid application downloads increased by 93% over previous Fridays in December.
- Droid accounted for 48% of download volume across the leading Android handsets (Droid, myTouch 3G, G1 and HTC Hero).
- App Store download volume is more than 13 times greater than Android Market.
Consumer spending during the holiday retail season, beginning with Black Friday, is among the most important predictors of U.S. economic health. Since the late 90s, tracking online sales of websites like amazon.com on the first Monday after Thanksgiving, Cyber Monday, has become a second important barometer. The National Retail Federation, the world's leading retail trade group, extrapolated that total spending for this year's Black Friday "weekend," Thursday-to-Sunday, was up 0.5% from a year ago. Additionally, Lazard Capital reported Cyber Monday sales were up strongly over last year, by 35%.
As we enter the holiday season, downloads in the iPhone App Store can also serve as an indicator of consumer spending. While App Store sales are small relative to online and retail, Apple's September announcement that the App Store surpassed two billion downloads demonstrates how quickly this digital market is growing, having doubled in just the last four months. Further, according to Admob, the App Store is already generating over one billion USD in annual sales. Finally, the iPhone OS installed base, which sold more than 12 million units world-wide for the quarter ending September 2009, is reaching meaningful critical mass. Flurry estimates that, life-to-date, more than 34 million iPhone and iPod Touch devices have been sold in the U.S. through the end of September 2009. This equates to roughly 10% of the U.S. population.
Monitoring application downloads tracked by Flurry over the last six months, we observe strong patterns of seasonality and an aggressive ramp toward the holiday season. Note that because the iPhone installed base grew so dramatically between last year and this year, we have selected a time series trend analysis versus a year-over-year comparison. The chart below reveals three phases: first, strong summer downloads; second, a dip in September Flurry attributes to back-to-school; and third, strong growth over October and November leading up to the holidays. Specifically, October downloads exceeded September by 30%, and November further grew over October by an additional 16%.
Historically, the week after Christmas has been the strongest for data downloads to mobile phones, since consumers load up after receiving new handsets as holiday gifts. With download growth at its current rate, Flurry predicts that December downloads will exceed November by at least 20%, making it a strong season for Apple.
The data in this report is computed from a sample size of over 3,000 applications, 45 million consumers and 4 platforms: Apple (iPhone and iPod Touch), Blackberry, JavaME and Google Android. Each day, Flurry tracks over 15 million end user sessions across apps that have included its analytics solution.
Apple's Weapon of Mass Consumption: iPod Touch
The highly publicized launch of Droid last month marked a major effort by Google, Verizon and Motorola to slow the iPhone's growing power in the marketplace. And while the Android platform is the most legitimate challenger to iPhone smartphone dominance, it's important to remember that the iPhone's flank is protected by an often overlooked, powerful fighting brand: iPod Touch. According to Apple, 58 million iPhone OS devices have been sold worldwide through September 2009. Of those, Flurry estimates that just over 40%, around 24 million are iPod Touch devices.
While it is clear that the iPhone has significant short-term revenue value for Apple, Flurry believes that the iPod Touch holds more long-term strategic value for Steve Jobs and team. As all industry eyes look to the iPhone, the iPod Touch is quietly building a loyal base among the next generation of iPhone users, positioning Apple to corner the smartphone market not only today, but also tomorrow. In terms of Life Stage Marketing, the practice of appealing to different age-based segments, Apple is using the iPod Touch to build loyalty with pre-teens and teens, even before they have their own phones (think: McDonalds' Happy Meal marketing strategy). When today's young iPod Touch users age by five years, they will already have iTunes accounts, saved personal contacts to their iPod Touch devices, purchased hundreds of apps and songs, and mastered the iPhone OS user interface. This translates into loyalty and switching costs, allowing Apple to seamlessly "graduate" young users from the iPod Touch to the iPhone. For OEMs hoping to challenge Apple, we believe an even greater sense of urgency must be adopted.
The chart below shows Flurry user sessions tracked across iPhone, iPod Touch and Android for the last six months. Over this period of time, the iPod Touch has gained four points, despite its already large installed base. While iPhone continues to grow in user sessions, its share of sessions has dropped, while iPod Touch and Android have increased as a percentage.
Even more powerful for Apple are the consumption patterns Flurry is detecting among the iPod Touch demographic, demonstrating this segment's power as a word-of-mouth promotional army. Anecdotally, we know the "iPod Touch Generation" is made up of heavy MySpace, Facebook and SMS users, who voraciously share their lives with, and influence their ever-expanding social graph. Importantly, this also includes promoting products they like. Empirically, Flurry compared how iPod Touch session usage has changed over the last six months across key application categories important to this demographic; namely, Social Networking and Games. While Social Networking's viral nature is understood, iPhone Games have become increasingly social with the inclusion of features like friends lists, leaderboards and remote multi-player modes. Together, Social Networking and Games category usage reflects the strength of the iPod Touch Generation's influence among its peers. As this segment increasingly migrates its social habits to smartphones, Flurry data shows that the iPod Touch is the largest beneficiary. The graphs below illustrate how total session growth on iPod Touch for Social Networking and Games categories is outpacing that of iPhone and Android.
Manga Stomps on to iPhone Faster than You Can Say "Godzilla"
The origin of Manga, Japanese comic books, is commonly traced back to the 18th century in Japan. Since then, the Japanese comic book industry has become not only an integral part of Japanese culture, but also a $3.6 billion industry. Visiting Japan today, one can observe people of all ages reading Manga in subways, cafes and other public venues. The export of Manga to other parts of the world first began around World War II, and then accelerated in the 1970s. Among the most recognized figures in Japanese popular culture, Godzilla has also starred in several of his own Manga books.
The iPhone, which debuted in Japan during July of 2008, initially sold poorly for many reasons described by Wired in "Why the Japanese Hate the iPhone" With the release of iPhone 3GS in June 2009, however, Apple has gained hard-fought ground in a market that boasts many of the world's most advanced smartphones. According to StrategyEye, the iPhone 3GS became the top-selling device in Japan during its first week. Over its first three months, Analysts estimate that well over 1 million iPhone 3GS units were sold in Japan. The result is that the iPhone platform is attracting a wave of support from Japanese developers.
Studying content distribution on the iPhone, Flurry is detecting the rapid infiltration of Manga on the platform. Flurry first described the phenomenon of iPhone as an eReader in an article entitled "After Playing Games, iPhone Gets Serious about Books" in its October 2009 Smartphone Industry Pulse report. Because comic books like Manga lend themselves more to brief sessions of reading than traditional books, especially with their rich graphical treatments, it makes sense that Manga is expanding aggressively to the iPhone.
The graph below shows the number of books released by a major Japanese Manga publisher to the iPhone App Store since July 2009. Note that the rapid release schedule comes just after the successful June 2009 launch of iPhone 3GS in Japan. With an aggressive ramp, this single publisher is already releasing more than five Manga books per day. We can expect this kind of content, well suited for the iPhone to continue to expand faster than Godzilla stormed Tokyo.