The rise and rise of the global app economy

It’s coming up to the ten-year anniversary of the app. That’s assuming you accept that Apple invented the concept in July 2008. Strictly speaking, it didn’t. But you can’t argue that Steve Jobs did such a good job with apps, he made them a ‘thing’ for the average consumer.
So, the last decade has definitely been the era of the app.
The numbers are astonishing: global app spending is now worth an eye-watering $86 billion a year according to App Annie.
It’s remarkable really. Over the years, experts have predicted that apps would be sidelined by the mobile web or by HTML hybrids. Two years ago, the hype was all around chatbots. And there’s been a continual murmur about general app ‘fatigue’ among users.
And yet look at the numbers. The app economy is still growing.
App Annie’s Q1 2018 revealed that the app market broke records set in Q4 2017. Global iOS and Google Play combined downloads hit 27.5 billion, while combined spend grew 22 percent year-over-year to $18.4 billion.
So, let’s take a deeper dive into what’s really happening in the market by answering some fundamental questions:
1. What is the size of the app economy?
The most recent figures (for 2016) suggest it was worth $1.3 trillion. That embraces the three major types of monetization: premium app downloads, in-app advertising and related mobile commerce.
2. How big could it get?
App Annie projects that the global app economy will be worth $6.3 trillion by 2021. It says annual spend per user will go from $379 to $1,008 as people move their spending from physical to digital and from desktop to mobile.
3. How much will users spend directly on apps in 2018?
It could be a landmark year. According to App Annie, the market will grow 30 percent on a record-breaking 2017 to hit $110 billion. The figure includes money made from app downloads and advertising (but not other spending made inside apps).

4. How many apps are available?

It’s an understatement to say consumers have plenty of choice. Google Play currently offers more than 3.7 million apps.
Meanwhile, iOS App Store hosts around 2.1 million apps. Interestingly, this is less than the number available in 2016. The decline is due to Apple eliminating many old apps that were unable to function on newer phones.
5. How do Google Play and iOS App Store compare by download?
Google Play downloads are more than double those of iOS App Store: 19.2 billion and 8.2 billion respectively as of Q1 2018.
6. How do Google Play and iOS App Store compare by spend?
Historically, iOS users have spent more than their Android counterparts. That’s still true. But the gap is narrowing. Consumer spend on Google Play in Q1 2018 grew 25 percent to $7 billion, while spend on iOS App Store was at $12 billion.
7. How many Android apps do users install every year?
At I/O 2017, Google revealed that over 82 billion apps were installed the previous year (up from 65 billion in 2015). One can expect another jump to be announced for 2017.
8. How many apps does the average person own and use?
The typical smartphone owner has 80 apps installed and uses around 40 of them in a given month.

9. Which countries consume the most apps?

China has overtaken every other market by some distance. In Q4 2017, Chinese app users spent an aggregated 200 billion hours in apps, with India second at 50 billion hours. Meanwhile $1 out of every $4 dollars generated from the global app economy originates in China.
10. Which countries develop the most apps?
Appfigures says 10 countries were responsible for roughly 75 percent of all new apps released in 2017. The US and China dominate at 33.5 percent and 15.9 percent respectively. After that come India, UK, Brazil, Germany, Japan, France, Russia and Canada.
11. How big is in-app advertising?
It’s surging – and it’s not slowing down. App Annie says the market will grow from $72 billion in 2016 to $201 billion in 2021. The boom has helped mobile out-perform desktop in digital ad spend. The small screen is now 51 percent of the total. The analyst says global advertiser spend will grow from $13 to $52 per user over the forecast period.
12. How many developers make mobile apps?
Evans Data Corp says there are 12 million app developers in a total developer ‘population’ of 21 million.
13. Which app category is growing fastest?
Flurry’s State of Mobile 2017 report revealed ‘Shopping’ to have grown by 54 percent year on year. Unsurprising, perhaps, as consumers migrate their spending online and in-app. ‘Music, Media, and Entertainment’ was the second fastest growing category at 43 percent. This may reflect the growth of streaming TV and music services.
14. Is there an alternative to the ‘official’ app stores?
There are over 300 for Android alone. They include the well-established Amazon Appstore and the Opera Mobile Store and a huge number across Asia Pacific especially.
After that list, it should be pretty clear that the app economy is still booming. But what about the future?
Well, the last ten years of the app economy have shown how new technologies – from payments platforms to video processing – can power fresh trends in the space.
It’s obvious this innovation will continue. The only question is which technologies will have the most impact. Augmented Reality? Instant Apps (which make it easy for users to use an app without downloading it in full)? AI? 5G?
In 2018, we will begin to see the answers.
Next time we’ll be delving deeper into digital and mobile advertising trends and looking at the growth and effectiveness of in-app advertising.