There’s been a lot of buzz about how important mobile apps are for years now, and an increasing number of tech startups are launching with mobile-only strategies. But a new study indicates the sector still has a ways to go before it attracts significant money from a wide breadth of users. In fact, the majority of people who use mobile apps today do not spend any money on them at all.
According to a recent study of US consumers conducted by ABI, some 70 percent of mobile app users spend “either nothing or very little” on or in applications. It turns out that, much like gambling or gaming, the mobile app market of today relies mostly big-spending “whales” to account for a bulk of its direct sales. The highest-spending three percent of all app users account for nearly 20 percent of the total spend in the market, ABI said.
Now, it isn’t that a majority of mobile users are uncomfortable with the idea of spending on apps at all: Two-thirds of app users said they have spent money on an app at least once, and of those people, the mean spend is a healthy $14 a month. But the whale issue becomes apparent when you look at the median mobile spend among those users, which is $7.50 per month. This shows that a small number of “big spenders” play a “disproportionate role” in the overall market’s revenue, ABI says.
It’s unlikely that this data will put the immediate brakes on the ongoing mobile app development gold rush. And it’s important to point out that a whale-driven customer base has allowed for long-term sustainability in a number of industries, in the tech space and beyond.
So what should be the takeaway here? According to ABI, it’s all about balance. “Don’t get obsessed by mobile and apps, but remember also the web,” ABI senior analyst Aapo Markkanen is quoted as saying in a press release accompanying the new data. “Most of the successful app concepts either support, or are supported by, a web component.”
There has been growing word for a while now that many of the companies who jumped head-first into the native app frenzy, particularly traditional news publishers, are starting to focus once again on their traditional and mobile web experiences. If the uneven revenue issue does not balance out over time, it will certainly be interesting to see how the larger landscape adjusts.