I think they mean if you have a hunch on what might be a trend, check out the search trends on Google. If it's going up and to the right, you might be on to something.
You can also use something like Market Samurai to do keyword analysis. But by god, do NOT give them your daily email address, they will spam the crap out of you. Handy tool though.
Trevor, after reading this article I wanted to subscribe to your list because it was interesting, and you sold the future content well. Apparently I was already subscribed from a previous article which I liked as well, so consider this a huge compliment, you're doing great!
It's not a matter of accuracy in this case, it's a matter of whether the regression has any meaning at all. Any regression can fit two data points, even a parabola. Of course, there are intuitive reasons to suspect that that is not the actual form of the distribution, but you can't actual show it from data with just two points.
But I have to assume that you did more data points when you actually performed this study yourself. Up to that point the methodology is really useful, so don't take this as criticism of the entire post.
Even with more data points, I'm not convinced that App Store ranking is a good independent variable. At best, this seems like a very poor proxy for ad store impressions or downloads. However, I would be very, very surprised if the relationship between those legit metrics and app store ranking were anywhere near linear when you're comparing the top 5 or so to the rest of the top 25.
The more data you plot the more you'll find an exponential increase in sales for every increase in Gross Ranking.
And if you watch the App Store rankings that makes sense. The apps at the top stay there, in the same relative order, for long periods of time. This suggests larger gaps in sales, vs lower ranking apps whose rankings fluctuate constantly.
The purpose of this exercise was to make reasonable estimates, not to get it exactly right.
What I found most interesting about this is how outdated the Distimo data is. I have a couple game apps in the Games Trivia category, which is conveniently less popular. According to Distimo, in May of last year it would take roughly 600 dls per day to reach the top 25. We're averaging 1000 downloads a day with each game and neither has cracked the top 60. Amazing how much a difference a year makes. Anyone know if Distimo has done a followup more recently?
Agreed, Trevor, good content. And maybe you're going to address in part two, but how does the presence of IAP factor into your considerations. In other words, not just profitability but doesn't business model also matter? Or do you just assume free/paid/freemium apps will be required in any niche and plan accordingly?
Great question. My first app wasn't free with IAP, but that's what I highly recommend to do now. It gets you a lot more downloads which helps you rank higher in search results.
If you do go with a paid app I'd recommend something people will pay at least $5 for.
More importantly we should be careful to extrapolate our behavior to the iOS masses. There's tons of apps I would never spend a dime on that are doing extremely well.
Trevor, great work, I got another approach performed on Android market. The problem with categories in app markets is that they are high level classifications. Therefore, considering them as niche doesn’t tell us much. I performed a functionality-based analysis. I think this gives us a more precise niche definition. Here is my analysis: http://www.drdacademy.com/?id=an-analysis-of-the-android-app...
By the way I don’t think fitting a curve on two points on your result plot is right. Normally, we need a reasonable sample size.
This is a really interesting companion to Trevor's posts. Google providing those download "bins" lets us get some great insight into more accurate metrics. Thanks for sharing!
great second post.
I agree with most of what you say but have to point out that you left out a big technique: search trends.
what you describe is finding apps that are already there and competing against them.
A different approach would be analysing search trends and match against niches with no apps.
For example, I remember discovering that paddling was a huge "industry" (as a sport) with ZERO apps.
For this, you would use services such as SearchManSEO or mobileDevHQ to identify niche "hotness" or the oldschool SEO way using GoogleTrends/Keywords.
hope it helps, Giacomo