Is Apple Killing App Downloads?

Mobile app downloads are falling as the cost to acquire new users goes up for marketers. The average aggregate daily download volume of the top 200 free U.S. iPhone apps dropped by 4.9 percent to 4.23 million daily downloads in April, down from 4.45 million in March, according to a research by app user acquisition platform Fiksu.

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“April’s continued downward trajectory of app downloads was expected, as no major events sparked discovery during the month,” Fiksu chief executive Micah Adler said. “However, we observed more aggressive advertising spending as marketers moved out of the first quarter lull and began to seek new opportunities to compete for rank especially in the dynamic social networking and games categories, which experienced volatility during the month.”

Movement in the social networking and games categories in the Apple (NASDAQ:AAPL) App Store introduced new mobile advertising opportunities and increased competition, causing marketing costs to increase. In April, the Cost per Loyal User Index rose by 12.3 percent to $1.46, up from $1.30 in March. For instance, Facebook’s (NASDAQ:FB) pricey acquisition of Instagram during the month drew attention to the social networking app category.

Apple has also been cracking down on download bots, or automated tactics that raise app rankings. “Additionally, app marketers continued to scale back their use of robotic install tactics in response to Apple’s policy on third-party marketing services,” Adler added.

Fiksu’s indices measure monthly fluctuations in competition for rank in the App Store, as well as the cost to acquire loyal users. Data was sourced from more than 24.9 billion mobile app actions, including app launches, registrations, and in-app purchases, and more than 357.6 million app downloads.

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