Internet of Things
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Global mobile app revenue will grow more steeply than the number of app downloads over the next five years, according to forecasts just published by Ovum (see Figure 1). Downloads will see a marked slowdown in mature smartphone markets as they approach saturation, while average revenue per app will continue to grow as in-app spending intensifies.
Ovum predicts that global mobile app revenue will grow by 2.2 times over the next five years, from $36bn in 2015 to $79bn in 2020, compared to a 1.8 times increase in the number of app downloads – from 211 billion in 2015 to 378 billion in 2020.
Globally, both downloads and revenue will sustain strong growth, but the growth curve for downloads is more mature. That is because there is a natural limit to the number of apps that consumers will download and use regularly.
Also, consumers are likely to become more selective about which apps to download as more and more app preview options emerge, such as Google’s Trial Run Ads and rewarded app-install ads, which reward users straight after viewing the video of an app rather than forcing them first to download the app, as is the case with the now largely disreputable incentivized ads.
At the same time, the average time spent by users on apps is increasing, which also increases the amount of revenue that can be squeezed from them. Also, developers are getting savvier about how to monetize freemium apps, and apps other than games, such as subscription-based music and video services, are beginning to make more of a significant contribution to app revenue.
Two other factors will further fuel growth for both downloads and revenue: the extension of the mobile OS app ecosystems to other connected devices, such as wearables, TV, and IoT, and the continued “appization” of the mobile Web, as both start-ups and established firms herd more and more of their digital traffic towards apps.
The downloads growth curve would be much flatter by the end of the forecast period if it wasn’t for the increasing proportion of downloads generated by emerging markets (see Figure 2), especially China, which has been the biggest downloads engine of the past few years and will continue to take the largest share by far of downloads over the forecast period.
Ovum’s App Download and Revenue Forecasts: 2015–20 provide a breakdown of global app download and revenue numbers by region and for 67 countries. They include metrics such as country rankings, average revenue per download and share of global or regional downloads and revenue.
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