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Apple App Store downloads $1.1B of sales during record-breaking season

Apple experienced a jolly holiday commerce season, with customers spending more than $1.1 billion on new mobile applications and in-app purchases within a two-week period.

The technology giant enjoyed a fruitful time during the weeks of New Year’s and Christmas, perhaps helped in part due to the significant amount of consumers who received new smart devices and wearables as holiday gifts. The App Store’s record-breaking season lends credence to the notion that apps are king in the mobile world, especially if they offer opportunities for engagement that last beyond the initial download.

“Mobile is on fire and it is showing no signs of stopping,” said Jarah Euston, vice president of growth at Yahoo, Sunnyvale, CA. “Apps now reign supreme as the top media channel in the United States – last year, for the first time ever, time spent inside mobile applications by the average U.S. consumer exceeded that of TV.

“We know that 90 percent of our time spent on our mobile devices is spent in apps. Flurry also just reported that in 2015, overall app usage grew by 58 percent.”

The season for receiving
Plenty of consumers received new iPhone, iPad and Apple Watch devices as holiday presents this year, which likely fueled the barrage of app downloads and purchases. This has one major implication for mobile marketers – that the time period between Christmas and New Year’s Day may be the most lucrative time to release a new app.

In the period leading up to January 3, 2016, smartphone owners spent more than $1.1 billion on mobile apps and various in-app purchases, culminating in a record-breaking season. New Year’s Day nabbed the top revenue-garnering spot, seeing customers spend more than $144 million.

This broke the single-day record for sales held by Christmas the week before.

The year’s most popular app categories included entertainment, gaming and social networking, with apps such as Minecraft, Clash of Clans, WeChat and Facebook Messenger emerging as clear winners.

The introduction of new smart devices in 2015, namely the Apple Watch and Apple TV, likely had a strong effect on the App Store’s massive sales. However, the growing trend of smartphones turning into phablets – devices with bigger screens – must also receive due credit for powering the App Store with such force.

“Wearables, smartwatches and Apple TV are still in their early stages,” Ms. Euston said. “While they surely contributed to Apple’s success, we shouldn’t overlook the impressive growth of the ‘phablet,’ in Apple’s case, the iPhone 6 Plus.

“We call these the ‘Unstoppable Media Consumption Device’ – as Flurry recently reported, 27 percent of all new devices activated over Christmas this year were phablets. In our new State of Mobile study, we found time spent on phablets grew 334 percent year-over-year (2.9 times more than the average), compared to 117 percent for all form factors.”

Looking ahead
Apple’s center-stage role in mobile commerce is not likely to change this year, especially as more retailers continue accepting Apple Pay as a form of payment. Smartphone sales are also poised to skyrocket with the impending release of the iPhone 7 model.

With Apple selling 22 percent more iPhones during its 2015’s third quarter, driving a 36 percent increase in iPhone revenues, the company’s glory days appear to be far from over (see story).

Marketers not currently offering mobile apps for their products, services or brands may find themselves at a loss this year, especially if they actively maintain a significant audience of fans. However, brands that have already rolled out apps must ensure they are not simply resting on their laurels.

The Apple App Store has been lucrative for developers

Research from Flurry shows that the highest growth in app sessions stems from existing users, underscoring why continued mobile engagement should be at the top of marketers’ to-do lists.

“Content is king,” Ms. Euston said. “Apps have cemented their position as the top media channel and grabbed more time spent from the average American consumer.

“But what we’re seeing is that growth in app sessions is coming from existing users – Flurry estimates that 40 percent of the 58 percent total growth in app sessions in 2015 came from existing users, compared to 20 percent in 2014 and 10 percent in 2013,” she said. “This means it’s going to be harder than ever to keep consumers loyal to your apps.

“It also means marketers have to look for new approaches to content discovery and traffic acquisition. Another important thing to keep in mind is that if the current trends hold, the phablet will become the dominant form factor by October of next year. So it’s really important marketers optimize their apps for bigger screens.”