The increasing Relevance and Revenue of Apps in 2016

1.  App downloads grew 15 % 

app #1Downloads, revenue, and time spent in Apps all grew by double digits during 2016.  Further, time spent in apps grew more than 20 % to nearly 900 billion hours in 2016 – one of several metrics the global app economy saw healthy growth during the year. In conjunction with this, time spent in Apps in the US grew over 25 %. Worldwide, downloads increased 15 % to over 13 billion for both iOS and Google Play.

2.  Revenue paid to Publishers up 40 % to $89 B

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The platform owners paid out nearly $89 billion in revenues to publishers from In-App ads and App store revenue, up 40 % from the year before. That means Apps generated $127 billion in revenues overall, as platform owners take about 30 % of revenue.  The $89 billion figure includes revenue paid to third-party App Stores and advertising revenue. If you look at the revenue paid out to publishers by Google Play and iOS, the total is $35 billion worldwide. As with downloads, the increase in the iOS App Store’s revenue was largely driven by China, which contributed nearly half of the App Store’s annual growth. During the year, India grew massively, surpassing the U.S. as the No. 1 country by Google Play downloads. India grew from more than 3.5 billion downloads in 2015 to more than 6 billion last year. The country’s smartphone penetration stands at only 30 percent, so there is a massive chance for more growth.  While mature markets experienced strong growth in 2016, emerging markets, including India, Indonesia, Mexico, and Brazil, saw even more impressive gains. The average number of Apps used per month is about 30.

3.  Apps used / month – by country

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China took the top spot for iOS App Store revenue. Overall, Android is more popular in developing markets.  Apps are now disrupting established industries (ie: banking, retail, entertainment, etc.). In conjunction with this, Financial Apps have grown in popularity, thanks to ease-of-use improvements with PayPal, Venmo, Credit Karma, etc. Apps.  For example, Venmo’s monthly average users doubled from October 2015 to October 2016.

Video streaming went big time in 2016, with sizeable growth for YouTube and Netflix.

Shopping Apps grew 30 & in year-over-year revenue in the US during the busy month of November. As well, France, Germany, and the UK experienced high growth rates. In conjunction with this, Black Friday in the US was the first day to ever generate over $1 billion in U.S. online mobile sales with the average American having 3 or more shopping apps installed on their iPhone.

Gaming also had a huge year, accounting for 75 % of overall App revenue on iOS and 90 % on Google Play. Noteworthy is that Pokémon Go generated $950 million in revenue in 2016, attracted new users; and didn’t eat into the usage or revenue of other games.

The top five Apps by downloads on iOS and Google play were Facebook, WhatsApp Messenger, Facebook Messenger, Instagram, and Snapchat.

The five top games by downloads were Pokémon Go, Piano Tiles 2, Subway Surfers, Slither.io, and Clash Royale.

The top five games by revenue were Monster Strike, Clash of Clans, Pokémon Go, Game of War: Fire Age, and Clash Royale.

The top five Apps by revenue were Spotify, Line, Netflix, Tinder, and HBO Now.

Lastly, the average revenue per user (ARPU) has been increasing significantly. Japan stood out, as the top 30 games in Japan monetized over twice as effectively as the top 30 in the U.S. This was almost entirely driven by the Role Playing Games (RPG) subcategory, which accounted for roughly two-thirds of Japan’s top 30 games by revenue.  While Japan maintained its overall ARPU lead, China stood out in  terms of growth, increasing nearly 10 times since 2014. As with Japan, RPGs were the driving force in China. However, a deeper look revealed that a specific type of RPG, massively multiplayer online RPGs (MMORPGs), was especially important.

4.  Example of App User Revenue increase

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Jan 17, 2017                        CAIL                       …. from App Annie Report