The app space in review: 2019 was stronger than ever

New industry numbers show that the mobile app market is still booming. Downloads are up, spend increases, and ad revenue is setting new records. We bring you an overview…

In 2017, Reid Hastings, the boss of Netflix, was asked by financial analysts to name the company’s biggest competitor.

His answer? Sleep.

Hastings knows that we live in an attention economy. There’s so much entertainment/activity out there for us to choose from.

One streaming video company doesn’t just compete with another streaming video company. It fights for our attention. In other words, with TV and reading and gaming and social media – and maybe even going to sleep. The reason for this is undoubtedly the smartphone. Mobile gives us the option to access the content at any time and in any place. It’s made the friction between all the different options go away.

As a result, the amount of attention we now direct to mobile is astonishing. And the latest annual report from market analyst App Annie puts a number on it.

In 2019, we spent 3.7 hours a day looking at our phones. That’s 674 billion in total. That’s up 10 percent in 2018 and 35 percent up from 2017. To use a trendy phrase, mobile is smashing it. And this is why, 12 years after the smartphone first became a thing, the industry is still growing.

Every year, the App Annie report reveals ever-bigger numbers. There’s always the sense that ‘this is the peak.’ But it never is.

Here are the top-line figures for 2019:

  • Consumers spent $310 billion on mobile in 2019
  • They spent $120 billion directly on apps
  • They generated $190 billion in mobile ad spend
  • Consumers downloaded 204 billion apps – a new record
  • Annual downloads grew 45 percent in three years (this excludes re-installs and updates)
  • Of course, there are nuances buried in these huge numbers.

The most glaring are the regional differences. The growth in developing markets has been massive, while more established regions have flattened a little. This is illustrated by overall app downloads. Here are the key numbers.

App download growth since 2016:

  • Worldwide – 45%
  • India – 190%
  • China – 80%
  • Indonesia – 70%
  • Brazil – 40%
  • US – 5%

However, what’s interesting is that app spend has increased across the board. So even in markets where the volume of download growth has slowed, consumers are still spending a lot more. Here’s an indication.

App spending growth since 2016:

  • Worldwide – 110%
  • China – 190%
  • US – 105%
  • South Korea – 100%
  • UK – 85%
  • Japan – 45%

How can we explain this? Well, it’s mainly thanks to in-app subscriptions. According to App Annie, 91 percent of non-gaming consumer spend in the top 250 apps came from subscriptions (in the US). These are apps in categories such as dating, health and fitness, music, education, business, productivity, and obviously video streaming. Many experts believe this revenue will rise substantially in 2020, not least because of the launches of Google Play Pass and Apple Arcade.

To remind you, both services let users pay a subscription to access hundreds of games and apps, completely free of ads and in-app purchases. In Google’s case, the service costs $4.99 a month. It’s going live first in the US, but will invariably roll out in other regions. It will be interesting to see how these subscription services impact the mobile games market. Yet again, gaming totally dominates the app space.

App Annie’s numbers show just how much:

  • Mobile games in 2019 generated 25 percent more revenue than all other app categories combined.
  • Mobile gaming generated 2.9 times more consumer spend in 2019 than console games
  • 1121 games generated more than $5 million each in 2019, and 140 games each generated more than $100 million in 2019
  • Mobile gaming is on track to surpass $100 billion across all mobile app stores in 2020

The numbers are pretty amazing. But they will almost certainly be beaten again next year. AppAnnie believes mobile spend will rise again in 2020 and will top $380 billion. It predicts mobile ad spend is due to a big spike and will add another $50 billion next year to reach $240 billion. You can download the full report here.

If you want to see which are the top-performing apps, games, and companies in your country, there’s a complete list – from Argentina to Vietnam. You never know, next year your app could be in there. Keep working!