A report from mobile AppStore marketing intelligence firm Sensor Tower examining the most downloaded apps during the second quarter of 2020 provides a detailed and exciting analysis of consumer behavioural trends during a period of global Coronavirus lockdown restrictions. It also pinpoints surges in user demand for certain categories of content (gaming, entertainment, music and business apps, for example). Telcos can upsell these services to their customer base through direct carrier billing (DCB) partnerships with app stores, merchants and content providers.
Sensor Tower’s Q2 2020 Store Intelligence Data Digest report calculates that combined worldwide App Store and Google Play downloads grew by 32% in the three months ending June 2020 compared to the same quarter in 2019, with Google Play accounting for 68% of the 37.8bn total (up 35% year on year). Sensor Tower’s estimates include worldwide downloads and unique installs across 67 countries implemented via iPhone, iPad and Google Play only, with Apple and Google apps pre-installed on new smartphones excluded.
Web conferencing tool Zoom was the most downloaded app between April 1st and 30th June (narrowly ahead of TikTok), becoming just the third to surpass 300m installations in any one three month period tracked by Sensor Tower. Other business conferencing apps achieving their highest ever download figures during the Coronavirus pandemic impacted quarter included Google Meet (111m) and Microsoft Teams (67m) with Microsoft’s Skype also making the top 20 rankings in Europe.
Categories such as business, education and health and fitness experienced huge boosts during Q220, in some cases seeing downloads more than double in the first few weeks of April as the pandemic took hold. While the numbers have since declined, they remain well above pre-COVID-19 levels, however – and for business apps, in particular, more than 80% higher. Other business apps that saw record downloads in Q2 include WhatsApp Business (39m) – a version of WhatsApp’s messaging platform designed to connect small businesses and their customers – and Cisco Webex (28m).
Video/audio streaming apps dominate entertainment
There were also significant increases in the volume of entertainment apps (up by around 34%) downloaded in the second quarter as social distancing restrictions made it difficult for much of the world’s population to meet up in any sort of outdoor venue. Over the top (OTT) video and audio streaming apps Netflix and Spotify made the top 20 most downloaded apps worldwide with video streaming services Disney+ and Hulu also appearing in the Top 20 in the US, the country with a disproportionately high number of Apple mobile device owners compared to the global average.
Telcos in various parts of the world are likely to have already benefitted from that trend, particularly those with DCB partnerships, that allow movie, music and gaming fans to pay for purchases of that digital content via their mobile phone bills across multiple countries and geographical regions.
Spotify has forged deals with various European operators including Telia and KPN for example, with DCB payment options helping to deliver a 20% uplift in customer conversions from free trials to paid subscriptions in 2019 long before Coronavirus restrictions kicked-in. Similarly US telcos Verizon and Sprint allow their customers to pay for Disney+ through their mobile phone bills. The same is true for Netflix subscriptions with Nextel and Lusacell in Mexico, and Vodafone and Airtel in India. And down under, Vodafone Australia partnered DOCMO Digital to offer post-paid subscriber subscriptions to Amazon Prime, Spotify Premium and Netflix paid for via DCB in 2019.
Ovum’s Global Carrier Billing Forecast 2019-2024 report suggests that while video purchases accounted for just 12% of all direct carrier billed digital goods and services in 2019 (US$5.9bn of the US$49bn total), that figure will expand to US$26bn (33% of the US$79n total) by 2024. Ovum’s forecasts were made before the onset of the COVID-19 pandemic, however – in hindsight consumer adoption of OTT video services is more likely to accelerate faster than anticipated initially providing a further boost to DCB transaction volumes and value.
Games downloads see the biggest increases
The Sensor Tower data indicates that all other app categories were dwarfed by the volume of mobile games downloaded in the second quarter of 2020: 2.7bn from the App Store (up 20% on Q219) and 12.4bn from Google Play (up 51% year on year). By contrast entertainment apps from Apple and Google stores combined amassed just 2.1bn downloads in total, up from 1.8bn with an aggregate growth rate of just under 17% across both sources.
While all game genres contributed to that expansion, changes in consumers typical daily travel routines contributed to a particularly marked spike in demand for “hyper-casual”(those with simple, lightweight gaming mechanics which are tap to play) and puzzle games ahead of the arcade, simulation and lifestyle orientated titles.
The majority of the most downloaded titles – Save The Girl, Garena Free Fire, PUBG Mobile and Gardenscapes – are free to play while being funded either by advertising or through additional paid-for content and downloads. Garena Free Fire is estimated to have contributed a large chunk of the US$512m revenue its Singapore-based publisher Sea Limited earned in the first quarter of 2020 for example, when it hit a new record for peak daily active users of over 80m. In India, the percentage of paying users exceeded 10% for the first time, with players purchasing weekly memberships that give them access to additional characters, skins, weapons and other add-ons.
Ovum again suggests game purchases accounted for 52% of all direct carrier billed digital goods and services in 2019, equivalent to US$25.5bn, and will grow to deliver $31bn by 2024. Sensor Tower has already noted a significant rise in mobile game revenue in the second quarter of 2020. In the US for example, revenue from mobile games grew 16% to US$153m in April compared to March, before increasing again to U$157m in May. While turnover then dipped back to US$145m in June, revenue levels still remain well above the US$116m spent in January and February this year, highlighting increased consumer appetite for playing mobile games during the lockdown period.
Shopping apps grow while travel and sports apps start rebound
Shopping apps too saw increased adoption in the second quarter (up 33% on App Store and 13% on Google Play) as growing numbers of consumers switched to ordering groceries and other physical goods online as retail stores closed their doors or restricted entry. Walmart ‘s mobile app was popular in the US as was SHEIN in Europe, while Amazon and Wish made the top 20 on both sides of the Atlantic.
Finance apps saw only marginal increases, however – up 9% on Google Play and down 5% on the App Store. Bucking that trend in the US was Square’s Cash App, a mobile payment tool that allows users to send and receive peer to peer payments using their smartphones, backed by an optional Visa debit card that allows them to make retail purchases and withdraw cash from ATMs. In Europe, a QR and barcode reader app that can be used to make mobile purchases at physical stores also made the top 20.
Those categories of mobile apps which were hardest hit by the COVID-19 lockdown started to see an uptick in interest as restrictions were gradually lifted. They include travel, navigation and sports apps (given most professional competitions were suspended). In Norway for example where lockdown restrictions were lifted earlier than elsewhere, apps focussing on local travel like Google Maps and Vy (as well as transit and scooter apps like Tier) have mostly recovered to previous download volumes. However, air travel and holiday-orientated equivalents continue to struggle.
Smartphone device of choice for lockdown interaction
Except for iPad tablet apps that make up a small portion of the total (anything between 5-15% depending on the specific app in question and regional variations) all the apps tracked by Sensor Tower were destined for mobile phones which have become the go-to device for digital interaction during the COVID-19 pandemic.
Growing numbers of consumers across the world have turned to their smartphones for shopping, entertainment, banking, gaming, socialising and business meetings in the first half of 2020, and many will continue to do so long after lockdown restrictions are eased or lifted altogether. Not all are likely to end up paying for those apps and the content they access through them, but a certain percentage will and that should continue to drive increased revenue for developers and the app stores that host and sell their software.
Telcos can consolidate DCB partnerships with app stores, merchants and content providers too can benefit from increased activity levels. And as a result, they can drive stickier customer relationships and an increased share-of-wallet of their users.