Think of iPhone software sales as the anything-goes, impulse-buy section on the way out of a store. Customers have downloaded more than 500,000,000 free and paid apps, but nearly all abandon the software the following day.
According to research by Pinch Media, 30 percent of customers return to a paid app the second day after purchase. About a month after buying an app, less than three percent of customers still use it. After two months, that base drops to about one percent. This disposable marketplace makes the iPhone software community even more fragile.
If customers don't return to an app, why should they bother paying more for something good? They'll keep expecting to pay just a dollar or two, instead of seeking out pricier, better-quality software. Few developers then invest time and risk into longer projects, opting instead to shotgun out a bunch of cheap apps and hope for a hit. Goodbye quality.
I've been enthusiastic about the iPhone's business power because of the productivity apps hidden in the store. And it's possible that the App Store will sustain two tiers of developers and customers: people who pay more for quality and those who pay less for quantity.
But the study makes the App Store seem just like another empty tech fad, ready to burst at any moment. Software developers--and Apple--should care about the long-term use, even though they don't make additional money after the initial download. Otherwise, customers will move on to the next big thing.
The App Store can't become a platform ecosystem with this much software abandonment. For now, I'm scaling back hopes for more business-ready tools. Pay little, and expect even less.
Zack Stern is a San Francisco-based writer and editor who admits to occasional impulse buys in stores and online.
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