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App economy grows

App economy to grow to $6.3 Trillion by 2021
August 21, 2017

Recent research shows the app economy will be worth $6.3 Trillion by 2021 - a 380% increase on last year's $1.3 Trillion value.



Mobile app downloads are still benefiting from double-digit growth. According to the latest figures from researcher App Annie, mobile users installed 25 billion apps in the second quarter of 2017 alone, an annual increase of 15%. 17 billion of them were from Google Play. Indeed, the gap between Apple App Store (iOS) and Google Play sales is growing every year, last year it increased from 105% to 135%. This trend is mainly attributable to the rise in the number of smartphone users from 3.4 billion to 6.3 billion by 2021. The usage period will increase from 1600 billion to 3500 billion Hours during the same period.

app downloads q2 2017

This surge is fueled in particular by emerging markets, especially Brazil "which for the first time exceeds the US market for a first quarter and is positioned second after the Indian market". The subcontinent has been the first country in terms of downloads since 2016. So, it is Google Play that has the advantage, since it sells apps for affordable Android smartphones that sell like hotcakes in these emerging markets.

The exciting flow-on from all this is that mobile revenues will balloon. According to AppAnnie, between 2016 and 2021 app revenues will increase fivefold. App Annie allocated revenues from the mobile economy into three categories: advertising, m-commerce and application purchases. 

“m-commerce” includes all transactions via mobile, for example on Amazon, and is the category that makes up the lion’s share of the growth. Expenditures will be multiplied by 5 to reach just over $6 trillion by 2021. m-commerce is particularly popular in Asia where these services developed very early, while Europeans and Americans remain more attached to the computer. "For example, Alibaba announced that mobile accounts for 79% of the total value of transactions generated on its sales platforms in China in 2017, compared to 65% in 2016," notes App Annie.

In 2016, in-app advertising accounted for $ 72.4 billion. By 2021, it should reach $201.1 billion. This prediction is based on the increasing number of hours that smartphone users spend on their devices, which will double over this time.

Selling applications themselves is the third, and smallest, driver of growth. Consumer spending on shops will double from around $51 Billion in 2016 to over $100 Billion in 2021. The App Store will retain its supremacy over this trade. Apple attracts affluent consumers looking for more luxurious products who are more willing to spend money on apps than the average Android user.

So one thing is clear from all this – it’s not to late to cash in on the app boom!