As apps are increasingly becoming the first choice for communications, entertainment, information and shopping, App Annie, the mobile app data and insights platform, published its App Monetization Report highlighting key trends that will help shape the app economy in the coming years. According to this report, combined worldwide in-app advertising and app store net revenue is expected to surge 270% and exceed $189 billion by 2020. The report also shows the installed base of smartphones and tablets will be more than double from 2.7 billion in 2015 to 6.2 billion by 2020.
According to some of the key findings of the report, by the end of 2015, APAC had grown larger than the Americas in revenue. Much of this growth was driven by China. APAC’s revenue is expected to more than triple from 2015 to 2020, while America’s and EMEA’s will more than double.
Asia will deliver more than $85 billion to publishers by 2020 and Asia Pacific leads strong revenue growth across all regions.
The US will continue to experience significant revenue growth, particularly from in-app advertising and drive the Americas region overall. The US market will also remain the single largest market for publishers, delivering $59B in 2020, compared to $54B from China.
Transportation apps such as Ola cabs, and shopping apps such as Flipkart, Myntra, etc. attract the staggering growth of 339% and 359%. These apps transform traditional industries, driving innovation and changing the competitive landscape.
Through 2020, China will be the primary driver of worldwide revenue growth and extend APAC’s lead over the other regions. Chinese market will get more mature in transition from explosive download growth to one of higher engagement and revenue growth. India is also expected to soar with download growth.
Globally, time spent in apps grew by 114% on Android phones from H1 2014 to H1 2016 according to App Annie Intelligence. Communication and Social apps like WhatsApp Messenger and Facebook attract the largest share of time spent. Time spent in the Media and Video category has grown by 212% over this period and is on the brink of overtaking games.
Non-game apps will continue to grow at a faster rate, as game app’s share of in-app advertising and app store revenue will fall from 66% to 55% by 2020. On the other hand, advertising will fuel app (excluding games) publishers as their share of revenue will climb from 34% ($24 billion) in 2015 to 45% ($85 billion) in 2020.
The report further sheds light on revenue growth across the iOS and Android ecosystem where iOS continues to lead the US and Western Europe. While Android leads worldwide downloads by a factor of 7:2, due to its dominant installed base, iOS leads on revenue by 3:2 due to its more affluent customer base. iOS will maintain its lead over Google Play and third-party Android through 2020 though the latter two are projected to grow faster.