App store downloads shine on Christmas

Apple found a nice Christmas gift under its tree this year.

App Store downloads for the iPod Touch were 1,000 percent higher on Friday, Christmas Day, than the average of the three previous Fridays in December, according to a report released Monday by research firm Flurry.

Downloads for the newest generation, the iPod Touch 3G, soared more than 900 percent on Christmas, noted Flurry's "2009 Holiday Report: Christmas Growth." But the 1,000 percent leap in iPod Touch downloads overall may have been triggered by a flood of iTunes gift cards, believes Flurry.

The rising popularity of the iPod Touch also gave Apple reason to celebrate. Of the estimated 58 million iPhone and iPod Touch devices on the market, about 40 percent of those, or 24 million, are iPod Touch devices, according to another Flurry report released in November.

With a large number of Touch devices likely given out as holiday presents (it was one of Amazon.com's top three electronics sellers), App Store downloads for the iPod Touch jumped past those for the iPhone for the first time, outpacing them by 172 percent. The trend continued the following day, with iPod Touch downloads on December 26 exceeding those for the iPhone by 104 percent.

The volume in overall App Store downloads also grew by more than 50 percent in December (with estimates for the final week of the month) over November, surpassing Flurry's estimate of only 20 percent.

Flurry's Vice President of Marketing Peter Farago spoke with CNET about the success of the App Store. Though some forecasts question how much further the App Store can grow, Farago thinks this is just the beginning. "The growth has been meteoric for Apple for iPhone and iPod Touch penetration," he said. "They're already past 50 million units in the marketplace for iPhone and iPod Touch."

Farago notes that while the iPhone is a killer device that gives people a portable computer in their pocket, Apple knows it needs third-party developers, which is one reason the company controls the store. And developers will go wherever they can get a good customer base, realizing that they can build an app once for the App Store and draw in a lot of consumers.

Even recent criticisms leveled against the App Store haven't dented its growth. Though some developers have complained that the App Store is hard to deal with, Farago says there are a lot of success stories from people who have created and sold apps through Apple.

Farago also sees the iPod Touch as Apple's silent killer, with a huge market share that will help the company in the years to come. "What I'd be scared about if I were a phone maker is that Apple has a relationship now with all these teens and pre-teens using a device that is basically an iPhone with the radio turned off," he said. "They've got 24 million [customers], and with Christmas, probably add a couple million or so to that. All those kids are getting trained to be iPhone users in the next two to five years."

Google's Android Market can't compare with the App Store at this point, but its recent download volume should offer Android vendors some holiday cheer. December downloads from the Android Market store grew by more than 20 percent over November. Downloads for Motorola's Droid, in particular, rose 93 percent on Christmas Day compared with the three previous Fridays of the month. The Droid also captured 48 percent of all download volume versus other top Android devices, including the myTouch 3G, G1, and the HTC Hero).

Farago also sees the Android market off to a promising start. The installed hardware base isn't there yet, but that may start to change next year as Flurry expects about 50 new Android devices to hit the market. Once enough of those devices get into the hands of consumers, more developers may be drawn to create Android apps.

Of all Android devices, the Droid is so far leading the way. "It's the most successful [Android] headset that enables downloading pretty easily," said Farago. "For a phone that's not the iPhone, it's got a pretty good installed base."

Though Android may always play second fiddle to Apple, at least in the foreseeable future, that doesn't mean the Android Market can't have a significantly good business, notes Farago. Flurry predicts that by the end of next year, 150,000 apps will be available for Android phones, up from around 20,000 to 25,000 now.

Flurry provides analytics for mobile app developers to help them track downloads for their applications. As such, the company is able to determine which mobile devices are downloading which apps.