New Applications Struggle As Smartphone Users Spend More Time With Their Favorite Apps

Author

Ewan Spence, Contributor

September 17, 2014

Boston-based Localytics has released a study today showing that users are spending more time in their existing smartphone applications compared to a year previously. A strong showing for social networks, health, and fitness apps emphasize the increasingly connected and personal focus of the smartphone. It also shows the difficulties new apps and developers have in trying to break through.

The survey results are measured over a month of usage. Consumers are using applications more – an increase year on year of 21%. What’s unusual about this number is how it has increased. Rather than spend longer in an application, users are opening each application more often during each month.

Users are seeking more moments of engagement, but the duration of these moments has not changed by any notable degree over the last twelve months. For business models that rely on users engaging with more content, this increased dwell time should be reflected in the income streams from an application.

It’s also worth nothing which application areas are growing. The top three (music, health & fitness, and social networks) have a focus on the individual. Be it communicating with others online, entertaining themselves with their smartphone as a media player, or the rise of the quantified self in taking personal measurements, smartphones have become more personal over the last year.

But users are becoming entrenched with their existing applications. Fewer applications are being downloaded and trialled each month. Those that are downloaded have a low conversion rate from free trial to an income generating installation. And the current market is looking even more unbalanced towards the incumbent apps.

The app economy that drives the smartphone ecosystem continues to be a key part of Google and Apple’s overall strategy, but it is becoming harder for new developers (and to a certain extent new apps from existing developers) to gain traction on consumer handsets.

With fewer new apps being installed, and more time being spent on the applications already installed by the user, it is harder for new titles and developers to break through and become an established player. It’s not just the volume of applications out there that is making life difficult for developers, it’s the strength that incumbent applications have. The app economy always needs a certain level of refreshment, and there will always be companies ready to take a punt, but it’s getting harder and harder to guarantee a break-even on the investment in an app, let alone create a commercial hit.

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