Study: Mobile app spending to double to $156B by 2023
- Spending in mobile apps on Apple's App Store and Google Play will rise 120% to $156 billion worldwide by 2023, per an estimate from app analytics firm Sensor Tower. The researcher predicts App Store spending will rise by about 16% a year to $96 billion in four years, while Google Play spending will increase by 19% annually to $60 billion.
- While Google Play's projected growth rate is faster, that won't be enough to overtake Apple's 62% market share in 2023, per Sensor Tower. The researcher predicts that Apple will dominate almost every global area except Latin America and the Europe, Middle East and Africa (EMEA) region by 2023.
- Latin America will show the most growth for Google Play, rising 408% to $2.8 billion by 2023, followed by Africa's 406% growth to $430 million. Africa will be the App Store's fastest-growing region with a 296% gain to $420 million in four years, followed by Latin America's 239% surge to $2.4 billion. Google Play isn't available in China after many of Google's services were blocked in 2010.
Sensor Tower's data should be encouraging to Apple, as CEO Tim Cook seeks to boost Apple's services revenue to $50 billion by next year amid a slowdown in iPhone sales. The researcher said subscription revenue will help to drive the App Store, and that by 2023, 60% of its revenue will come from games. Apple this week unveiled new subscription services for entertainment, news and video games to give iPhone users another reason to stick with its platform. Apple News Plus, a digital newsstand of more than 300 magazines, charges $9.99 a month, but Apple won't reveal the subscription charges for its Apple TV Plus streaming service and Apple Arcade gaming platform until they launch in the fall. Those services could add to the billions that Apple earns from services including Apple Music, Apple Pay and iCloud storage.
As Apple prepares to unveil Arcade, Google revealed plans for a new video game platform called Stadia that lets players stream games from the cloud. However, it's not clear how Google plans to monetize the service, whether through a subscription fee or sponsorships. Given its dominance in digital advertising, Google conceivably could sell ads into gaming sessions or collect a portion of in-app purchases of digital goods.
Beyond Apple and Google's U.S. operations, Sensor Tower's data indicate that developing markets in Latin America and Africa will drive the most growth for app stores as those regions build out their wireless infrastructure. That means marketers and app developers need to be prepared with localized versions of apps in different languages to appeal to a wider group of cultures.
China is the top market for the App Store despite a temporary freeze on approvals of game licenses as the government sought to crack down on gaming "addiction" among children. The government this year resumed game approvals after a government shake-up that combined the country's top media regulator into the ruling Communist party's propaganda department, per the Financial Times. The thawing of game approvals could help the App Store.