Only 30 per cent of people who buy an iPhone application actually use it the day after it was purchased, according to Pinch Media, a New York-based startup that provides iPhone developers with analytics on their applications.

Only about 20 per cent of people who download a free application were using it the next day, the research firm found. Paid applications fared slightly better with nearly 30 per cent of people still using the download. And after 90 days, the percentage of people using downloads hovers around 1 per cent.

The findings were based on the monitoring of more than 30 million downloads.

Those are amasing numbers. It is not a new pattern, but back then, with the App Store just a month old, it was hard to know whether that usage model would last, it noted.

Now it is clear that seven months, 15,000 applications, and 500 million downloads later, things have not changed. App Store activity continues to be huge; Apple has made the App Store the centerpiece of its iPhone marketing over the past few months, highlighting the breadth and depth of applications that are available on the App Store for business and entertainment.

According to Pinch Media CEO Greg Yardley, Apple has built such an easy-to-use distribution (as well as payment processing) platform for iPhone applications that people find it very easy to move onto the next thing that catches their fancy. The lack of a 'try-before-you-buy' feature means iPhone users have no choice but to take the plunge, and given that most iPhone applications are free and the ones that do cost money are very inexpensive, there is little incentive to carefully shop around for the one application that best meets your needs.

Only about 10 per cent of iPhone applications appear to retain an audience over time, and most of those are games, entertainment applications such as movie listings, and things like Facebook.

But developers are still making plenty of money from the other 90 per cent, he said. As noted, people are always willing to try new iPhone applications, meaning that building a better mousetrap is still a very viable business model for the world of mobile computing.

Yardley thinks there is still a great deal of opportunity for developers on the App Store, which is not that surprising given he makes his living by advising iPhone developers. And it is true that if the installed base of iPhones continues to grow, there will be more and more niche opportunities to cater to the needs of high-school students and seniors, and everyone in between.

For most developers considering ad-supported applications, Pinch Media advised taking the paid route instead. It believes less than 5 per cent of applications are suitable for advertising.

In looking at the numbers, Pinch Media said a paid application returns at least 70 cents per user. For an ad-supported application to make the same amount of money, the developer would have to receive $8.75 per thousand clicks. However, today's advertising rates are typically 50 cents to $2 per thousand clicks.
Apple posts robust results

The company beats its guidance and Wall Street's expectations in its Q1 2009 earnings, outlining the best quarterly results in Apple history. The primary reason for the success was the jump in sales of iPhone and MacBooks;iPod sales were up 3 per cent from the year ago period.

Quarterly profit jumped to $1.61 billion, up from $1.58 billion a year ago. Revenue increased to $10.17 billion, from the $7.9 billion a year ago. That beat the analysts expectation for $9.74 billion in revenue. Meanwhile, gross profit margin last quarter was unchanged at 34.7 per cent.

Apple sold 4.36 million iPhone 3Gs in the first quarter, representing an 88 per cent unit growth over the year-ago quarter, bringing the overall total sold to 13.7 million. Apple also said it had sold 2.5 million Macs, up from 2.3 million one year ago.

Since its summer launch, the Apple App Store has seen nearly a half-billion downloads and now boasts 15,000 applications.

Analysts still see the iPhone solidly superior to its competition.

However, ''some - notably Google, Palm, Microsoft, HTC - appears to offer 'good enough' functional alternatives, including PC-like internet browsing, consumer UI/navigation, touch manipulation, messaging, applications/services, and carrier functionality that may appeal to some potential iPhone customers," a Wall Street analyst said.