Sure there’s yearly reports on everything from app usage to revenue. We welcome these and they can provide developers with vital information about the app economy. But often it can be difficult to understand how these trends will affect your app.
So we’ve tried to help. We’re going to look at five interesting stats based on data from the last year. Then we’re going to attempt to understand what these trends show, how it will affect monetization, engagement and other app metrics. We’ll also look at how developers can adopt their app strategy to suit these trends.
Last year app mobile device app downloads reached over 175 billion
This represents a 60% growth on 2015. Now that’s healthy, and there are a few reasons for this.
Firstly, more apps are free to use or try and more developers are finding this model attractive. For the consumer this means that apps are free to download. With the rise in subscription models and other post-download monetization options, this is greta news for publishers too.
The number of smart phones in circulation has increased, especially in emerging markets. Rapid mobile adoption shows that there is still huge potential for app growth.
Mobile devices now have much better storage options. Users previously had to manage device storage carefully. The lowest storage bracket on newer devices has increased and cheaper cloud options leave a lot more space on devices for apps that would have previously taken up too much space.
Finally, people are prioritising mobile to complete tasks that would have usually been difficult on a mobile device. Apps are now much more secure and user-friendly. This makes tasks like shopping or managing finances much easier.
What can developers learn from this?
You should think about making your app free to download and monetizing after the app experience. Users increasingly expect apps to be free.
Whilst it’s still important to keep the size of your app as low as possible, this isn’t as much of an obstacle as before. Instead users are looking for apps that help them to achieve tasks on their mobile. Positive user experience is important for users. They want to be able to do powerful things in a great app experience, without having to open their laptop.
Consumer spend exceeded $86 billion
When we look at the total spend by users the figures make for positive reading. This growth remains strong thanks to the increase in smartphone adoption in the developing world. The ability for publishers to capture more revenue from their users should not be overlooked.
In terms of the app store, app revenue is still higher in iOS than Google play. Worldwide gross app revenue reached $38.5bn from the app store in 2017 compared to $20.1bn from the Google play store.
This shows that Apple products do continue to attract, on average a user that is is more likely to part with cash via apps. However, both stores showed similar revenue growth levels of around 35%.
The consistent growth suggests that publishers are successful implementing monetization strategies. This is allowing them to generate more revenue per user. This may include subscriptions and freemium etc.
Developers will be happy to see that monetization in top markets maintained a steep growth – 70% in the US and 35% in the UK. But the real story of the last year in terms of app development is the scale of growth in developing markets.
The short story is this – the app economy is in a great place right now. Consumer spend has doubled in 2017. Publishers will need to look at their monetization strategy in developed markets. Here they will need to balance experience with monetization. As well as this they should be looking at new ways to monetize without choosing an advertising solution.
App store consumer spend in China grew by 270% in one year
App store spend is growing at a much faster rate in emerging economies.
China and emerging markets are fantastic examples of where developers should be looking in terms of app monetization. In the last year apps are becoming widely used in citizens’ daily lives. Much in the same way that apps have revolutionised other lifestyles, the same is happening in emerging markets. This is because more people are using mobile devices to perform daily tasks.
Rapid growth in downloads across other developing nations will provide even more opportunity for growth.
There now exists a lag between the number of downloads in these emerging markets and the equivalent revenue for app developers. The potential for monetization is huge. Publishers need to move to make sure they can tap into one of the biggest monetization opportunities out there.
Add to this that India and Brazil are areas where app usage is also increasing at at an alarming rate. India is now in second place globally in terms of number of app downloads. In these economies Android devices are more popular. This means that ensuring you can support both platforms could be the key to sustained growth.
What does this all mean for developers?
Firstly, we can still conclude that the average iOS user is worth more than an Android user in terms of monetization potential. But growth is steady across both OS.
The success of publishers monetizing after the point of purchase continues to drive revenue in developed markets. Subscription models and other models allow time for the publisher to educate and engage users on their apps value. This encourages better monetization. Ads are still a strong source of revenue for apps. But apps as a service are increasing in number and developers are getting good results from this monetization model.
In developed markets app discovery is becoming more difficult. But, the potential for revenue through monetization after the point of download is increasing.
Mobile apps are dramatically increasing in the developing world. The rapid number of new device adoption means a huge amount of new users. The value of these users is still low compared to developed markets. But, this still represents a huge opportunity for revenue growth.
Each mobile user spent 1.5 months in apps
It’s safe to say that users are spending more of their time in apps. And it’s also pretty certain that users are using more apps, on average. Last year users spent on average over 3 hours a day in mobile apps.
This presents far more opportunities for developers to create effective engagement strategies. Users want to complete more tasks on a mobile device and they love to be able to do this in apps.
Improving lifetime value and customer satisfaction is a crucial part of creating a successful app. Being able to engage apps leads to better monetization and more chance of increasing your user base quickly.
There are two things going on here. In developed markets, users are doing much more on their phones. But in emerging markets users have skipped the use of a desktop and see mobile as an effective way to complete certain tasks for the first time.
The time is now for developers to put experience centre of their app strategy. Their app solution should take advantage of the increased amount of tasks that users are doing on mobile. In some ways engagement is more important than downloads – if you can’t keep users in your app then you’ll churn users and very quickly have a worthless app. These figures show that users want positive experiences and the ability to complete their goals inside apps – developers should focus on delivering this.
The average smartphone user accessed around 40 apps per month
More tasks than ever are being completed on mobile.
You might think that all that time is being spent on the bigger apps. This is simply not the case. Users are looking to apps to perform a variety of tasks that can only be achieved by a single app. Users are looking for powerful apps in each category and they are choosing the ones with the best experience and best tools for the job in question.
Engagement is of course important for monetization. Keeping users engaged and happy is key to generating high revenue. That’s why these stats are promising for developers. If you can successfully implement a great engagement strategy you will be able to monetize effectively.
As app attention grows publishers will need to understand what this means for their app. This could mean focusing on UX and understanding how improving this will mean more engaged users. Or it could mean focusing on how push notifications can improve app retention.
What does this mean for developers?
As users spend more time in apps and use apps to solve problems and complete tasks developers will need to seize the opportunity and ensure that their app offers a seamless user experience.
Experience is key to successful monetization. Publishers that are looking to increase revenue, especially in emerging economies will need to focus on retaining their users.
The stats say that users are spending more time in apps, but they won’t just choose any old app to reach their goals. Apps still need to be powerful and they still need to have a great experience to attract and retain users.
Grow your app with Tamoco
James is the head of marketing at Tamoco