Apps powered by artificial intelligence struggle with long-term customer retention, according to a new report from subscription management provider RevenueCat.
The findings highlight a contradiction in the AI app economy: while these products convert users and generate revenue effectively early on, they fail to keep subscribers over time. The report suggests this volatility points to deeper issues in user value and long-term quality.
RevenueCat analyzed over 1 billion in-app transactions from more than 75,000 developers. The company found that AI apps represent 27.1% of the platform’s total app base. Photo and video apps have the highest penetration of AI technology at 61.4%, while gaming apps have the lowest at 6.2%.
Retention rates for AI apps lag significantly behind non-AI competitors over longer periods. After 12 months, AI apps retain 21.1% of subscribers, compared to 30.7% for non-AI apps. Monthly retention stands at 6.1% for AI, versus 9.5% for non-AI. AI apps see subscribers cancel annual subscriptions 30% faster than non-AI apps.
Conversely, AI apps outperform in short-term metrics and monetization. Weekly retention is higher for AI apps at 2.5%, compared to 1.7% for non-AI apps. AI apps also convert trial users to paid customers 52% better, with a conversion rate of 8.5% versus 5.6%.
Refund rates are higher for AI apps, sitting at 4.2% compared to 3.5% for non-AI apps. Despite this, AI apps generate 39% higher monthly realized lifetime value, averaging $18.92 per user against $13.59 for non-AI apps.
RevenueCat provides tools for managing subscriptions across iOS, Android, and web platforms. The company generated more than $11 billion in revenue for developers annually based on the data analyzed for this report.
