With iPhone 4S Sales Topping 4M Over The Weekend, User Acquisition Costs Temporarily Double

By Kim-Mai Cutler Comment

With Apple reporting that it sold just over 4 million new iPhone models during the weekend, user acquisition costs appear to have doubled coming into this week, according to conversations we’ve had with the biggest networks that specialize in paid marketing for iOS apps.

Most of those 4 million new iPhones 4S devices were probably upgrades. The Facebook for iPhone smartphone client — which we sometimes look at as a proxy for growth of the overall iOS platform — added about 1 million new unique monthly active users over the weekend, according to AppData.

While the amount any developer has to pay to break an app into the top of the charts varies widely on how well their game retains its users, it can take $25 to $50,000 per day to get into the top 25 in the U.S., Funzio co-founder Anil Dharni said in a panel of top-grossing mobile game developers I moderated last week at GDC Online in Austin. The biggest networks that do paid acquisition of users are telling us that those costs over the weekend roughly doubled.

Bigger companies like Electronic Arts are capitalizing on the launch of the iPhone 4S. EA is running an aggressive sale, as it often does over holiday weekends, with titles like Sims Medieval going for 80 percent off. All of these promotions make it tougher and more costly to get visibility on what is sure to be a competitive week.