Technolgy Rules: App downloads and revenue again broke records in the first quarter of 2018

Monday, April 9, 2018

App downloads and revenue again broke records in the first quarter of 2018

Global app downloads and consumer spending in apps had yet another record quarter, according to a new report from App Annie, out on Monday. In the first quarter of 2018, iOS and Google Play downloads grew more than 10 percent year-over-year to reach 27.5 billion – the highest figure to date. In addition, consumer spending on iOS and Google Play grew 22 percent year-over-year to reach $18.4 billion – also a record number.

The download figure is especially notable because App Annie is not counting app updates or re-installs. That means someone re-downloading an app on a new phone – like one received as a gift over the holidays – wouldn’t have been counted here. Only new app installs were counted.

Plus, the report points out that the total dollar amount to the app economy is much higher than the $18.4 billion reported for Q1, as App Annie only takes into account paid apps, in-app purchases, and subscriptions. It’s not measuring things like in-app advertising, the commerce taking place in apps (e.g. shopping and ride-sharing), or the money being made on the third-party Android app stores around the world.

This is not the first time App Annie has reported record numbers for downloads and consumer spending. The app marketplaces have continued to see steady growth, even as reports of app saturation in the U.S. circulate.

In Q4 2017 – the busy holiday quarter – the app stores had also broken these same records around downloads and revenues. Specifically, Google Play saw its highest downloads to date in the fourth quarter. The app stores had a record-breaking Q3 2017, too – something App Annie attributed then to the growth of the app market in China, India, and other Southeast Asian nations.

This time, App Annie pointed to India, Indonesia and Brazil’s impact on the year-over-year growth in Google Play downloads, and the U.S., Russia and Turkey’s impact on the growth of iOS downloads.

Also notable is that Google Play achieved another record of its own in Q1 2018, with record growth in consumer spend thanks to the U.S, followed by Japan and the Philippines. The Play Store grew 25 percent year-over-year, versus iOS’s 20 percent growth. Despite this, iOS continued to have a large lead in terms of total dollars spent.

Music & Audio along with Entertainment apps had a big impact on Google Play spending, the report noted, both on a quarter-over-quarter and year-over-year basis. This is attributed to the rise in music and video subscription services delivered via apps. App Annie isn’t the only one to spot this trend – app store intelligence firm Sensor Tower had previously found that top subscription video on demand apps grew by 77 percent in 2017, reaching $781 million in revenues across iOS and Google Play. And Netflix became 2017’s top non-game app by revenue.

App Annie said also that iOS spending in Q1 2018 benefitted from subscriptions to health and fitness apps, driven by New Year’s Resolutions and people’s embrace of the subscription model. The U.S., followed by the U.K. then Germany saw the largest market share growth quarter-over-quarter and year-over-year.

Combined, Google Play and the iOS App Store offered 6.2 million apps by the end of Q1 2018, with games driving downloads across both stores during the quarter. PUBG Mobile and Fortnite were especially big, App Annie noted.

Shopping apps also saw large year-over-year growth in market share, the report found.

More broadly, the new report is yet another example of how big a role emerging markets are having on app downloads and the app economy. This trend, while still remarkable, is not all that new. In 2016, China overtook the U.S. in App Store revenue, and App Annie has continued to note China, India and other emerging markets as key drivers of growth in its quarterly and annual reports.