How Price Drops Affect Sales Ranking in the App Store

Dropping the price of your app in Apple’s App Store can help increase revenues, according to a new report by Distimo. The report, which looked at the effect of downloads based on price drops found that cumulative downloads grew by an average of 1665 percent five days after a price drop in the Apple App Store for iPhone. While not as huge, cumulative downloads grew by an average of 871 percent on the iPad.

Despite a lower price point, this huge spike in downloads leads to increases in revenue. According to the report, revenue increased by 95 percent for iPhone apps three days after a price drop and revenue increased by 51 percent for iPad apps within three days of a price drop.

Here is more from the report: “The effect on downloads of a lower price ends, when the price increases again. Download volumes in the Apple App Store for iPhone drop by -46%, aggregated over five days after a price raise. In the Apple App Store of iPad, the drop in downloads is somewhat higher, -57%.”

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