App Store tipped to remain top earner through 2021 - Mobile World Live

App Store tipped to remain top earner through 2021

30 MAR 2017

App Annie predicted Apple’s App Store will continue to be the most lucrative apps outlet through 2021, tipping consumers to spend a gross amount in excess of $60 billion in the store between 2017 and 2021.

In its second annual App Store Forecast Report, the business intelligence company said Apple’s dominance will be assured because revenue per device will increase thanks to the vendor’s “comparatively affluent customer base.”

While Apple is expected to remain the top dog on a stand-alone basis, App Annie warned the combined consumer spend on Google Play and third party Android stores will surpass Apple’s store by end-2017, as Android’s dominant smart device market share and strong growth in the platform’s installed base makes up for users’ lower purchasing power relative to Apple device owners.

App Annie predicted global downloads across all mobile app stores will increase at a rate of 20 per cent per year over the forecast period, to reach 352 billion in 2021, when total consumer spending will hit $139 billion.

The majority (85 per cent) of consumer spending in 2021 will be generated by the five largest mature markets: the US, China, Japan, South Korea and UK. App Annie noted emerging markets will also fuel app store downloads, highlighting India, Mexico, Brazil and Indonesia as key countries.

Leading markets
App Annie tipped China to remain the world’s biggest market in terms of app store spend in 2021, accounting for more than $56 billion of the total. App store downloads are predicted to grow at a rate of 19 per cent per annum.

Though smartphone adoption is reaching saturation in major cities, much of China is still underpenetrated, leaving room for growth in app downloads as smartphone penetration increases in less populated parts of the country.

Of the emerging markets India is poised for “spectacular growth” in smartphone ownership over the next five years. As a result App Annie expects downloads to grow at an annualised rate of 28 per cent to nearly 23 billion by 2021.

Games
Gross consumer spend on games via all app stores should exceed $105 billion in 2021. While spend on other apps in categories including news, media and dating is forecast to grow significantly faster, these categories combined will account for a relatively modest $34 billion in 2021.

The study recommends publishers monetising through app stores should continue to invest in mature markets, as they will continue to see strong growth in gross app store spend per device.

Publishers in the media, news and dating verticals should increase their investments in subscription revenue models as these categories are forecast to be the primary beneficiaries of app store growth.

The company also recommended publishers looking to enter China, particularly in gaming and entertainment, should focus on localisation and partnerships to bridge deep-rooted cultural differences with the west.

App Annie predicted India has strong potential, but game developers will need to consider alternative monetisation models, like advertising, to thrive in this market.

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Saleha Riaz

Saleha joined Mobile World Live in October 2014 as a reporter and works across all e-newsletters - creating content, writing blogs and reports as well as conducting feature interviews...More

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