Health Report: The Global App Economy

People love apps. And every year they love them more. But by how much? Here is our latest summary of the world’s most dynamic market.

What’s twice the size of sneakers and three times bigger than toothpaste?

The obvious answer is the global app industry.

Yes, the public appetite for apps keeps on growing. After more than a decade, many experts predicted the mobile app would go into decline, defeated by (variously) the mobile web, bots, interactive eyewear, and consumer boredom.

None of that happened. The competition for apps either proved inferior or failed to materialize at all. And boredom? Certainly not. The huge variety of the app world and the ingenuity of its developers ensured saw to that.

So, incredibly, consumers spent $101 billion on apps in 2018, according to App Annie. Yes, that’s 3x the market for oral hygiene. You could call it a mouthwatering number. But there are many more. Let’s take a deeper dive…

What’s the size of the app market?

The $101 billion market figure for 2018 is 75 percent up on 2016 when the total was just under $60 billion.

And this extraordinary number does not fully reflect all the money earned in the app economy. It just includes money spent inside app stores (paid downloads, in-app purchases, and in-app subscriptions). It does not factor in in-app advertising or consumer spending triggered inside apps but outside the app stores (ie Uber fares, Amazon purchases etc).

Which countries are spending the most?

China dominates the app economy. It accounts for nearly 40 percent of spend (just under $40bn). It’s also growing fastest of any region, having doubled in size since 2016. Behind China are the US, Japan, South Korea, and the UK.

Which is the current top market for downloads?

Although China leads in overall downloads, the top country in terms of new app downloads in Q1 2019 is India. It had more than 4.5 billion new installs in the quarter.

How many apps are on the average phone?

In four countries, the average consumer has over 100 apps on his or her phone. The countries are the US, South Korea, Japan, and Australia.

Which genres are powering the market?

Er, games of course. What else? In 2018, games accounted for 74 percent of consumer spend in the app stores. This is unsurprising given that mobile is now the dominant format of the overall games market, with a 60 percent share over consoles, PC/Mac, and handheld.

The top games were AniPop, Honour of Kings and Candy Crush Saga. Honor of Kings, known in the West as Arena of Valor, grossed $87 million in April 2019 alone.

How many apps are available?

App downloads might be going up, but the number of available apps is actually falling. According to AppBrain, there were 2,647,828 products available on Google Play in May 2019. There were more than 3m a year ago.

This is because Google removes apps from the store, for which developers have failed to provide sufficient data. Meanwhile, iOS App Store hosts around 2.2 million apps.

How do Google Play and iOS App Store compare by download?

Google Play downloads now run at almost 3x more than those of iOS App Store: 20.7 billion versus 7.4 billion respectively as of Q1 2019. This is clearly a result of the much larger installed base for Android devices. According to IDC, Android comprises 86.7 percent of all smartphones against 13.3 percent for iOS.

Which app store makes more money?

One-third of all the downloads, two-thirds of all the money. These are the hard facts about the iOS universe when compared to Android. Apple’s App Store achieved 7.4 bn downloads in Q1, which accounted for 64 percent of all app revenue generated at $12.4 billion. Google Play grossed $7.1 billion from 20.7 billion downloads.

What were the most downloaded apps in 2018?

For all the extraordinary variety in the app space, the same titles dominate the market. Here are the top 10 combined iOS and Android most downloaded for 2018.

Facebook Messenger
UC Browser

What is the market’s biggest hit of the moment?

Byte Dance’s viral singing app, TikTok, is undoubtedly the flavor of the month. Actually, the months. It’s been the most downloaded app on the Apple App Store for five consecutive quarters. It was number three on Google Play in Q1 2019.

What’s the forecast for app spending?

App Annie is confident that the continuing growth in China and the emergence of a new wave of smartphone owners in developing markets will push the app market to new heights. It says the smartphone user base will reach 6.1 billion in 2022, and that this army of users will make over 250 billion downloads. That will deliver a market worth $156.5 billion by 2022.

Clearly, the trillion dollar app economy is going from strength to strength. People are spending more and more money inside apps.

But not just money. Time too. Every year people’s attention switches away from traditional media towards digital platforms – and for digital, read mobile.

In a follow-up article, we will track the progress of the digital ‘attention’ economy and explore what’s coming next in the world of advertising.

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