There is no doubt that we are living in the age of the app. Globally, cell phone penetration has exceeded 90% of the population, and even in the more remote areas of the world the majority of people have some kind of mobile device. The biggest change within the last few years has been in smartphone ownership. As recently as 2016, just under half of the world’s population owned some kind of smartphone. Fast forward to today and that statistic stands closer to 84%, which translates to around 6.65 billion people.
The vast majority of smartphone users interact with apps daily. In the younger demographic groups, well over half of all their digital media engagement is via apps. In America, the average person now spends more time using apps than they do watching television. The market is huge, and only continues to grow. On this page we take a look at the current state of the Google apps market, and see where it may go in the years to come.
What’s popular now
Stats for 2021 show that the leading category for Play Store apps was games, a trend that has continued into 2022. The most recent figures show that games account for around 14% of all app downloads, followed by educational apps at just over 9%.
Last year Google had a partial reversal on their policy regarding real money gambling apps. Having previously banned all casino apps except fun and social casino gaming, where no money is involved (directly), Google now permits them in 15 countries including the US, depending on the status of the local license. In Germany, gaming/casino apps also seen expanded payment options as payments via code or payments through cards in the GPay as the EU is pushing for liberalization of payments inside the app store eco systems.
There is currently no separate category for casino apps, so it is unclear whether they fit into the gaming or the entertainment group. Regardless, these apps are likely to account for a smaller percentage of downloads since they are not universally available.
Education, Health and Wellness
During the COVID-19 pandemic, app downloads increased as users sought ways to spend time while confined to their homes. Educational and entertainment services got a boost, as did health and wellness apps. Mental health has been a hot topic recently, and applications related to physical and psychological wellbeing were downloaded more than ever during the past two years.
Business and finance are two very popular categories, together totaling 13% of the market. Medical apps have also been on the rise, with more targeted solutions being developed to help users manage chronic conditions such as diabetes. One perhaps surprising statistic is that dating apps, despite being very visible and gaining a lot of attention, make up just 0.37% of Play Store downloads. Of these, Tinder takes the top spot.
Most Downloaded App?
However, the undisputed champion of the past two years has been the social video app TikTok. Since its launch in 2016 the download rate has grown exponentially, reaching 3.3 billion in 2021. While Facebook remains the world’s most popular social media provider with 2.9 billion regular users, TikTok has amassed 1.2 billion in a much shorter period of time. Whether this is a social app that is here to stay, or merely a passing trend, remains to be seen.
Revenue and Profitability
The app market is incredibly profitable. Accounting for all users from all app stores, global revenue rose from $356 billion in 2018 to $462 billion in 2019. At the current rate of growth, it is forecast that by next year, the figure may be close to $950 billion, of which just over $100 billion will be from the gaming sector. At the Play Store, just 3.3% of apps cost any money to download, so where does the money come from?
App developers have some options when it comes to making money from their products. Some decide to rely entirely on advertising for their revenue, but most have adopted the so-called freemium model. This approach takes various forms, such as users making micropurchases within the app, or paying for an ad-free version. Statistics suggest that users who are happy with a certain app are willing to spend money to get the most out of it.
A closer look at profit statistics shows that the most capable app for Google Play is a social casino game called Coin Master. This game has a lot of features besides spinning slots reels, but coins and spins are the core of the gameplay. These can either be earned in other aspects of the game, or purchased directly from the app’s store. Naturally, many players choose to pay for extra coins or spins, although it is possible to keep playing without spending any money.
TikTok is not far behind Coin Master in terms of revenue, netting $82 million at the Play Store alone in 2022. Advertising is the main source of profit in this case, although users can buy virtual coins and give ‘gifts’ to other users to show appreciation for their content.
Overall, gaming apps are the most profitable type – despite making up only around 14% of downloads, gaming garners around 80% of all profits.
Android and Google Play still on top
The Android operating system is the most widely used in the world, with a 72% market share in April 2021. The leading app store is still Google Play, with 3.5 million app available to download in the first quarter of 2021. In comparison, there were 2.2 million in the Apple App store during the same period. Other stores include Amazon, Windows, and BlackBerry, which all fall short of these numbers. Find more about February 2022 Google Play update here.
The market share for Android is slowly losing some ground to iOS, as more users fall for the lure of Apple products. Even so, it seems unlikely that Apple will ever overtake Android as the leading OS. Google is a politically unpopular brand in China, and the administration has decided to ban the Play Store in the country. Rather than opt for Apple, however, users in China go for local brands.
The market for apps shows no sign of slowing down. From banking to shopping, every day it becomes more and more possible to conduct most of our day to day business via our cellphones. At present, the majority of app revenue is shared by only a small percentage of providers. This state of affairs will probably continue for some time, but in the next few years even small businesses are likely to include dedicated apps for their customers. We also expect to see more doctor-approved medical apps come to market, as healthcare professionals recognize the value of these tools for patient care.