Will the Rise of Mobile CPI in Western Markets Affect Apple Inc. (NASDAQ:AAPL)?

7AAPL_chart.pngRecently published research figures provided by market intelligence company SuperData showed a dramatic increase of the cost-per-install (CPI) metric over the course of 2013. The study shows that ad-driven user acquisition costs on mobile devices have risen as much as 288%. Can this change in the mobile ecosystem have a real effect on top-tier players such as Apple Inc. (NASDAQ:AAPL)?

CPI ran rampant, especially in the holiday season of late 2013. SuperData predicted that user acquisition will be an increasingly competitive battle but the real issue may be that average revenue per user (ARPU) is lagging behind significantly, measuring growth of a mere 38%.

This divergence of indices escalated the most in the last two months and while the gap is widening, it doesn’t necessarily mean this business model is generating loss, as the values are relative. Pocketgamer commented on the data, underlining that this development may be healthy in the grand scheme of things as it may gradually phase out a model that allowed the companies with the most financial resources win the user acquisition battle.

Will the significant rise of CPI on mobile really be able to affect the top-level players such as Apple or Google Inc (NASDAQ:GOOG)? Not very likely. If the escalation of expenses is going to have a tangible impact on anyone, it will be the developers who will need to adapt to the changing landscape.

6AAPL_logo.pngThe revenue monsters on AAPL‘s app store, products such as King’s Candy Crush Saga and Supercell’s Clash of Clans, will hardly have any difficulties even if the CPI rises further, and those are the game apps that bring the most significant amounts of cash into AAPL‘s coffers. Still, the industry will likely be trying to find new, more cost-effective ways to attract new customers in the new year.

Recent analysis of Apple’s standing in the west underlines an oversaturation of the high-end market space and Apple’s big bid in the immediate future is expansion in China. How well app store hit titles will fare in this new marketplace dominated by local products and services remains to be seen.

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