Commentary

Free, Functional Branded Apps Do Better In App Store

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Among the raft of top 10 lists for 2010 Nielsen released today was a list of top paid app categories for the iPad. Not surprisingly, games was the most popular category, with 62% of users downloading game apps, followed by books (54%) and music (50%) -- and then shopping, and news and headlines, each downloaded by 45% of users.

Nielsen probably focused on the iPad because the device debuted this year. But the popularity of games on the Apple tablet is consistent with consumer behavior on the iPhone. A look at the top-selling paid apps for the iPhone this year highlighted in iTunes shows the top five game titles -- led by the huge hit "Angry Birds" -- to be identical to the top five titles overall.

OK, so games tend to dominate both the top free and paid downloads in the App Store. So what, if any, branded apps show up among the top titles in other categories? Among paid apps, the Nike + GPS app for tracking runs was among the top five in the health and fitness category, while Martha Stewart's "Martha's Everyday Food: Fresh & Easy Recipes" was among the top sellers in the lifestyles section.

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In news, the Drudge Report and Washington Post were the top paid apps, while ESPN ranked in the top five paid apps for sports (ESPN Radio and ESPN Fantasy Football 2). In travel, Kayak Pro was the top-selling title, and the Weather Channel and WeatherBug Elite led the way in the, you guessed it, weather category.

On the free side, branded apps made a better showing. Instead of only games in the top five overall, there was the standard version of The Weather Channel app, Facebook and Skype (in addition to "Angry Birds" and "Words With Friends.") Big offline and online brands also pop out across most categories, including finance, lifestyle, health, music, news and travel. These brands include UPS, PayPal, eBay, USA Today, Bing and Yelp.

So brands find the most fertile opportunity in offering functionality rather than entertainment, while casual games or simple novelties (Air Horn app) can steal the spotlight in the App Store. Brands also appear to gain wider uptake with free apps, which in one sense isn't surprising because they're, well, free.

Still, if people are going to pay for an app, you'd think they might look more to familiar or trusted brands for equivalent content or functionality. Yet based on the App Store's data, consumers seem just as willing to pay for generic apps for things like managing a checkbook or expense-tracking as branded ones. Go figure. So unless brands are counting on paid apps as a revenue stream -- like newspapers and magazines -- they're probably better off not charging in order to gain broader distribution.

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