IOS and Android device owners downloaded 1.2 billion mobile applications between Christmas and New Year’s Eve, pointing to continued upside potential for app developers.

New data from Flurry Analytics also shows that there were more than 20 million device activations during the Christmas-New Year’s week. The results from 20 countries show that the stronger performance was put in by countries that celebrate Christmas.

“This is great news for developers,” said Peter Farago, vice president of marketing at Flurry Analytics, San Francisco.

“What developers most look for is an increasingly large addressable market, which grows when the installed base of devices grows,” he said.

“In other words, the more devices consumers have in their hands, the more consumers app developers can reach via the platform.  The big download record numbers show that developers still have upside in their own success.”

U.S. is app happy
The last week of the year had more iOS and Android device activations that any other week of the year, according to Flurry.

Christmas Day was the largest single day for device activations, with 6.8 million iOS and Android devices activated. The day also saw a record-breaking number of app downloads: 242 million.

By country, the U.S. had 42.3 percent of the 1.2 billion apps that were downloaded or 509 million.

Flurry estimates that just prior to the holidays, there were 109 million active iOS and Android devices in the U.S. market or 41 percent of the worldwide total active installed base of 246 million.

“We’re really only just getting started when it comes to app downloads,” Mr. Farago said..

“In total there have been approximately 500 million iOS and Android devices sold,” he said. “However, there are roughly  2 billion consumers on the planet that are considered middle class or better off financially.

“Flurry recently released an extensive report showing the additional market upside per market in both established and emerging economies.”

China, which is the world’s second largest app market, had only 99 million downloads. The relatively low number of downloads in China is attributed to the fact that it has a largely non-religious population and does not celebrate Christmas as widely as in the U.S., according to Flurry.

The impact of Christmas on downloads was seen elsewhere, with countries such as Britain, Canada, Germany and France over indexing in terms of app downloads compared with largely non-Christian countries such as South Korea and Japan.

Flurry leveraged its data set from over 140,000 apps running on iOS and Android devices

Understand retention
Flurry expects app downloads to break the 1 billion per-week barrier more regularly in 2012.
This is because the market is still relatively new and more consumers are expected to jump onto the app bandwagon.

With the growth of the app market has come more pressure to create apps that standout from the competition and deliver an on-going revenue stream.

Marketers should use analytics to help them better segment, target and position their apps. They also need to insure that apps have a strong value proposition with the target audience.

“It’s true that low barriers to entry for apps have created intense competition for the consumer’s attention across app categories,” Mr. Farago said.“The keys are to measure application usage, understand your user base and focus on increasing engagement, just not acquisition.

“Where marketers get stuck in app-marketing is when they over-commit to acquisition without understanding retention and churn – this can be an expensive mistake,” he said.

“In the app space, simply shipping an app isn’t enough.  Marketers also need to be prepared to ship additional content and functionality over time.”

Final Take
Chantal Tode is associate editor on Mobile Commerce Daily, New York