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Chronicles

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Localytics, with data on 37K apps, reports slight YoY increase of app retention from 34% to 38%; 62% of users will use an app less than 11 times

Apple's iTunes App Store is home to over 1.5 million apps and Google Play hosts over 2 million, but the number of apps that actually get installed …

TechCrunch Sarah Perez

Context & Ripple Effects

Localytics' read across 37,000 apps lands in the middle of a running argument in this coverage: the stores keep getting bigger — Apple's iTunes App Store and Google Play together were already past 3.5 million listings when this report came out — while the share of those installs that stick barely moves. Later App Annie tracking showed the volume side winning decisively, with worldwide quarterly downloads climbing from 27.5B in Q1 2018 (Q1 2018 report) toward 130B for full-year 2020 (2020 full-year figures).

The reason the retention number matters despite its modest uptick is what it says about where value sits: if 62% of users abandon an app within roughly ten sessions, then a growing slice of the spending growth App Annie documents is coming from the minority who stay — which is why store-side interventions like Apple's iOS 11 "App of the Day" slot, which lifted featured apps' downloads by an average of 1,747% (Apptopia's measurement), became such a lever.

First-order effects

  • Developers buying installs on the iTunes App Store and Google Play are paying for a cohort where nearly two-thirds churn inside eleven sessions, so user-acquisition economics depend almost entirely on converting that small retained core.
  • Localytics positions itself as the measurement layer for this problem, selling engagement analytics into exactly the gap between install counts and active usage.

Second-order effects

  • Apple has an incentive to fix discovery rather than let paid acquisition dominate, which is the pressure behind editorial surfaces like "App of the Day" — a distribution channel whose outsized download lift makes featuring, not just search ads, a competitive battleground inside the store.
  • Analytics and re-engagement vendors compete for the same budget line: as downloads grow faster than attention, spend shifts from pure install campaigns toward retention tooling and CRM-style push messaging.

Third-order effects

  • If the pattern holds — downloads compounding while per-user retention stays flat — the app economy's valuation logic migrates from download rankings to revenue per active device, concentrating returns among apps that hold a loyal base and squeezing long-tail publishers who live on one-time installs.
  • Persistent churn also strengthens the platform owners' hand: with millions of interchangeable apps, Apple and Google control the scarce resource (attention at the top of the store), giving them growing leverage over developer terms and placement.

The trend: The app economy is shifting from a land-grab measured in downloads to an engagement market where retention rates and spend per active user decide which apps matter.