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Applause or App-Flop? Why Mobile App Ratings Matter to Your Portfolio

Disclaimer: This communication is provided for information purposes only and is not intended as a recommendation or a solicitation to buy, sell or hold any investment product. Readers are solely responsible for their own investment decisions.

 

Building a winning stock portfolio requires looking beyond just company names and stock prices.


Today, we're diving into product evaluation, specifically focusing on mobile app ratings.


This is crucial for companies where their core offering is the mobile app, or where the app drives a significant portion of their revenue.


Refer to this blog for other tools to evaluate webapp/ softwares or non-software related products.


Think Duolingo (language learning) or Airbnb (accommodation).


Airbnb mobile app
Airbnb mobile app

Why Ratings Matter?

Great mobile app ratings signal a positive user experience. Satisfied users are more likely to:

  • Keep using the app: User retention is key for subscription-based models and in-app purchases.

  • Recommend the app to others: Organic growth through word-of-mouth translates to more users and potential revenue.

  • Leave positive reviews:  High ratings build trust and attract new users.

Free Tool to Evaluate App Ratings:


Sensor Tower (app.sensortower.com) is a fantastic (and free!) resource to explore app performance. Let's use Duolingo as an example:

  1. Head to app.sensortower.com and search for the app name (e.g., Duolingo).

  2. Look for the "Ratings Breakdown" section. This shows the distribution of 1-star to 5-star ratings, giving you a clear picture of user sentiment.

  3. Don't forget to check both Android and iOS ratings. While iOS might get more attention, remember Android holds over 70% of the global market share (as per GS Statcounter: https://gs.statcounter.com/os-market-share/mobile/worldwide).


Duolingo has great ratings on both IOS & Android platform.

Duolingo ranks first in their category, and their competitors' no. of ratings are quite far behind.



The Takeaway:

Mobile app ratings offer valuable insights into a company's product strength and user satisfaction. By incorporating this analysis into your investment research, you can build a portfolio focused on companies with winning products and potentially, stronger financial futures.


Remember: This is just one piece of the puzzle. Always conduct thorough research before making any investment decisions.

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