New Report: After Playing Games, iPhone Gets Serious about Books

Flurry Inc., a leading mobile application analytics provider and one of the first developers to build, deploy and market direct-to-consumer applications, like Flurry Analytics. A service that allows developers to track consumer behavior and application performance, Flurry has gathered the information in a report which is computed from a sample size of over 2,500 applications, 40 million consumers and 4 platforms: Apple (iPhone and iPod Touch), Blackberry, JavaME and Google Android.

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The report says that the iPhone is a versatile multi-media device that has already significantly impacted the business models of music, games and other Media & Entertainment industry categories. In particular, since Apple launched the App Store in July 2008, game developers have flocked to the iPhone, creating an alternative for consumers to the leading handheld gaming platform, Nintendo DS. In Nintendo’s October 29 earnings call, the company cited iPhone competition against its DS as one of the reasons profits fell by more than half last quarter, from 133 billion yen a year prior to 64 billion yen, or $709 million.

Flurry researched the number of applications released to the App Store, by category, since its inception. The report aims to predict which sector of Media & Entertainment iPhone might next impact. From August 2008 to August 2009, more apps were released in the Games category than any other. This September, however, we observed another category, Books, usurping Games for the first time ever.

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To illustrate the surge in the supply of books to the App Store, the chart above compares the number of books and games released to the App Store per month, over the last four months, as a percentage of all released applications.

In October 2009, one out of every five new apps launching in the iPhone has been a book. Publishers of all kinds, from small ones like Your Mobile Apps to mega-publishers like Softbank, are porting existing IP into the App Store at record rates. Flurry first evaluated the iPhone as an eBook reader in its July Pulse (“You Trying to Swindle my Kindle?”) where it looked at consumer demand for eBooks. In that report, they observed that during the month of August 1% of the entire U.S. population was already reading a book on the iPhone.

The sharp rise in eBook activity on the iPhone indicates that Apple is positioned take market share from the Amazon Kindle as it did from the Nintendo DS. Despite the smaller form factor of the display, they predict that the iPhone will be a significant player in the book category of the Media & Entertainment space. Further, with Apple working on a larger tablet form factor, running on the iPhone OS, they believe Jeff Bezos and team will face significant competition.

In its August Pulse report, Flurry reviewed consumer loyalty by looking at how long and how frequently consumers used their downloaded applications. This time around, they’re escalating the conversation from retention to outright addiction. The chart below depicts growth of what we call the “Addict” segment, consumers that use an application more than 100 times per month, or more than three times each day of the month. These are the most active users Flurry tracks, and they fire up their applications more than 10 times more often than the average user, who access their applications around 8 times per month.

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The graph above shows significant growth in the Addict segment over the past six months. In September, 1.2% of the more than 40 million users Flurry tracked, or roughly one half of a million, used apps more than 100 times per month.

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Tarek is the founder and chief researcher at Youngberry, a youth research and marketing firm dedicated to the region. Tarek founded interactiveME.com and previously worked as Manager at Flip Media (Interactive Agency), Bayt.com (Job Site) and Consulting House Qatar (Consulting firm). He is researcher and writer on internet & disruptive innovation, entrepreneurship, and youth culture.