The mobile app marketplace may have cooled off in 2022 slightly from the pandemic-induced growth in 2020-21. However, there are no signs of reversal, with global consumer spending on mobile apps forecast to reach $233 billion by 2026, according to Sensor Tower’s last report. The App Store will account for $161 billion, growing at 13.7%, while Google Play will represent $72 billion of that, growing at 9%.
The number of app downloads is set to surpass a whopping 180 billion by 2026, fueled by the rapid proliferation of affordable smartphones and the mainstream rollout of 5G mobile services.
Google Play will dominate the number of downloads, given the sheer number of android-based smartphones with 143 billion of those downloads, with an expected growth rate of 5.8%. Apple App Store will approach 38 billion downloads growing by 3% between 2022 and 2026. Interestingly, the report suggests that app store spending on non-games will surpass that of mobile games for the first time in 2024. Thus far, consumer spending on apps has been dominated by the mobile games category.
The US will continue to be the preeminent mobile app consumer spending market, accounting for $86 billion of the projected $233 billion worldwide. Despite relatively low adoption growth, app revenue in the US will grow faster than the global rate at an expected 16.5% over the next five years, according to the Sensor Tower report. The next most significant region powering the growth in the app economy is Asia. App Store spending in Asia will grow by 54% to reach $66.9 billion, surpassing the $63 billion spending in the US by 2026. And while the volume of spending may be relatively lower in other regions, the growth rate in emerging markets will surpass that of developed markets.
Europe will account for almost $34 billion of that total consumer spending, with $20.7 billion on App Store and $13.2 billion on the Google Play store. The UK, Germany, and France will continue to lead European consumer spending. Russia is the only country with revenue growth of less than 40% (Google Play suspended billing services in March’22 due to the ongoing conflict). Sweden is projected for the fastest growth at 127% over the next five years. Switzerland and Spain will see spending more than double by 2026, followed by Italy and the Netherlands. The largest markets in Europe have become saturated for downloads, so much of the growth in new app downloads will be driven by countries in Eastern Europe.
Asia will be the fastest-growing region, accounting for $91 billion of consumer spending, with $67 billion on the App Store and $24 billion coming from the Google Play store. On the spending side, China, Japan, and South Korea dominate other markets in the region, especially in spending on mobile gaming. Their share of the spending for all of Asia will fall from 86% to 82%. Hong Kong and Taiwan will drive most of the spending outside those three markets. Consumer spending on apps is also expected to double in India, Indonesia, and Singapore by 2026. India will continue to be the largest market for mobile app adoption and will account for nearly half of all new app downloads in Asia. Other markets for the number of new app downloads are the Philippines, Pakistan, Vietnam, and Thailand.
While China will persist as a significant market for the App Store, expect the country’s app makers to continue shifting their attention elsewhere amid government regulation and mobile game publishing freezes. As a result, we project the U.S. to widen the gap with China as the top App Store market by both spending and downloads. On Google Play, the U.S. will continue to lead by consumer spending while India will keep its dominance in app adoption.
We expect consumer spending and download growth to be low across top countries in 2022 as consumers adjust to reopening economies. However, higher growth is expected to return to most top markets by 2023. Brazil is projected to have the highest revenue growth rate on Google Play despite its installs on the platform remaining flat at around 10 billion each year. This would propel it into the top ten countries by consumer spending on Google Play by 2026.
Revenue growth for non-game apps on the App Store will reach $91 billion in 2026 compared with $70 billion from mobile gaming apps. As a result of the high revenue growth outside of games, mobile gaming’s share of iOS revenue is expected to drop from 61% in 2021 to 43% in 2026. This is a dramatic shift given that games accounted for more than 80% of App Store revenue as recently as 2016. Entertainment’s share of App Store revenue is expected to climb by 5% over the next five years. Top apps in the category include TikTok, YouTube, and Tencent Video, ranking among the top-ten apps overall by revenue in 2021. Business app downloads are projected to more than double.
The app economy and consumer spending on mobile apps will continue to thrive. App developers across categories will need more to convert app downloads to paying users through subscriptions or in-app purchases. And the consumer experience for sign-ups and payments, therefore, is crucial to that conversion. Native in-app payment experience powered by direct carrier billing takes fewer clicks than payments through credit cards, for example.