Gun-Woong Lee, Arizona State University
Raghu Santanam, Arizona State University
Mobile applications markets with App stores have introduced a new approach to define and sell software applications with access to a large body of heterogeneous consumer population. This research examines key seller- and App-level characteristics that impact success in an App store market. We tracked individual Apps and their presence in the top grossing 300 charts in Apple App Store and examined how factors at different levels affect the Apps’ survival in the top 300 charts. We used a generalized hierarchical modeling approach to measure sales performance, and confirmed the results with the use of a hazard model and a count regression model. We find that broadening App offerings across multiple categories is a key determinant that contributes to a higher probability of survival in the top charts. App-level attributes such as free App offers, high initial ranks, investment in less popular (less competitive) categories, continuous quality updates, and high volume and high user review scores have positive impacts on Apps’ sustainability. In general, each diversification decision across a category results in approximately a 15% increase in the presence of an App in the top charts. Survival rates for free Apps are up to two times more than that for paid Apps. Quality (feature) updates to Apps can contribute up to a three-fold improvement in survival rate as well. A key implication of the results is that sellers must utilize the natural segmentation in consumer tastes offered by the different categories to improve sales performance.
Lee, G., Raghu, T. S., “Determinants of Mobile Apps Success: Evidence from App Store Market.” Journal of Management Information Systems, Forthcoming