Consumers Spent $120 Billion on Apps in 2019

Data Scout is LSA’s series that curates and draws meaning from third-party data. Running semi-weekly, it adds an analytical layer to the industry data that we encounter in daily knowledge building. For LSA original data, see the separate Modern Commerce Monitor™️ series.


At the turn of a new year, data come flooding in to indicate usage levels for various consumer technology. Most of that happens in December, such as the holiday shopping data we covered. But requisite lead time to tally the full-year data means lots of overspill into January.

That’s what we’re seeing now, especially with mobile app usage data. The latest example comes from App Annie’s State of Mobile in 2020 report. It reports that consumers downloaded 204 billion apps in 2019 which is a new record. It’s also up 6 percent year-over-year and 45 percent since 2016.

More importantly, the average mobile user spends 3.7 hours per day using apps. This is perhaps more telling than downloads, as it’s a closer indicator of engagement. That’s especially true in the mobile app environment where it’s all about monthly active users (MAU’s) and scarce home screen real estate.

$4.8 Trillion GDP Boost

Translated to dollars, this usage correlates to $120 billion in consumer spend, which is 2.1x the 2016 total. That includes premium apps, subscriptions and in-app purchases. The latter has exploded with the rise of games like Fortnite. In fact gaming accounts for 72 percent of all mobile app spending.

But it’s also notable that non-gaming is on the rise, which is obviously more relevant for our coverage in mobile local commerce. There, it’s notable that subscriptions are the primary way that non-gaming apps generate revenue. For example, 97 percent of spending in the top 250 iOS apps were from subscriptions.

Examples of top subscription apps are Tinder, Netflix and Tencent video.  Other notable findings include the fact that IoT apps — such as those that manage smart home devices — accounted for 106 million downloads. Gen Z also gets a nod for over-indexing in app time versus older generations.

Meanwhile, 2019’s record app usage is largely attributed to emerging markets. While growth is mostly flat in countries like the U.S. (12.3 billion downloads) Japan (2.5 billion downloads), and South Korea (2 billion downloads), India, China and Brazil saw downloads grow as much as 190 percent since 2016.

But China remains the largest market in sheer dollars with 40 percent of global spend. Ad spending combined with consumer spending is expected to reach $380 billion worldwide by 2020. The mobile industry is also forecasted by App Annie to contribute $4.8 trillion to the global GDP by 2023.

Apps For SMBs: A Double-Edged Sword

In closing, apps are a bit of a double-edged sword. They have much more engagement than the mobile web, to the tune of  90 percent of time spent with mobile. But that usage is increasingly consolidated by the top 20 apps. So for smaller entities (mid-market, SMB, etc.) a mobile web strategy is more prudent.

There are also options that lie between the apps versus web spectrum. Having a Facebook Page means that you’re already present and optimized for mobile distribution. The same goes for having optimized presence on Google My Business, Yelp and other distribution points for SMB mobile presence.

Meanwhile, App Annie’s data are notable for any entities (enterprise, SMB, agency) that reach users through mobile channels. Usage trends can inform where among the fragmented platforms and distribution channels to place your chips. This will be a moving target that we’ll continue to track.

Meanwhile, see the summary infographic from App Annie below.

 

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