Consumer spending across app stores worldwide to top $110 billion in 2018

Consumer spending on all mobile app stores will surpass $110 billion in 2018, according to a new report from App Annie, out today, which forecasts the state of the app ecosystem for next year. The $110 billion figure represents a 30 percent increase from the year prior, the firm also said, adding that the majority of the overall spend will come from games, as before.

However, the introduction of in-app subscriptions – a newer monetization model for apps – is starting to have an impact on non-games’ share of consumer spend. Though games still dominate in terms of overall dollars spent, the share for non-game apps will increase in 2018 as its growth is now outpacing that for games, App Annie said.

In addition, the report called out China, India and Brazil as top countries to watch in 2018. China’s growth rate, in particular, will “significantly outpace” the rate for the rest of the world. That’s even more notable given that China is already the top market today for iOS App Store consumer spend.

India and Brazil, meanwhile, will see time spent on Android phones increasing in 2018, continuing the trend from this year which saw 50 percent and 30 percent growth, respectively, over 2017. India also has seen a big jump in Google Play downloads, coinciding with the launch of Reliance Jio’s network in September 2016. And the emerging market of Brazil still has room for further growth since – like India – it has a large population who does not yet own a smartphone.

Other changes impacting the app ecosystem include the app store revamps from both Apple and Google Play this year. In 2018, these efforts to improve app discovery will continue to gain traction, prompting increased downloads of entertainment apps and others meant for users’ leisure time. This increased discovery will also lead to a rise in in-app purchases, App Annie said. Meanwhile, needs-based apps and utilities will still be found more often by app store searches and word-of-mouth recommendations.

The report also called out a particular category of apps – AR apps – as seeing increased adoption in 2018.

For example, Niantic’s upcoming Harry Potter: Wizards Unite will generate excitement for AR gaming, while apps that layer additional context over the real world, including Google Translate and At Bat, will see widespread traction with users.

Another category of apps that has driven a large amount of consumer spend this year is streaming video apps. Year-to-date through October 2017, streaming video apps have led to an increase of over 85 percent in consumer spend on iOS, and over 70 percent on Google Play. This space is becoming increasingly fragmented – in the U.S., for example,  the share of those had four or more of the top video streaming apps installed on their iPhones increased year-over-year to more than 30 percent in October.

The report delved into other trends for the following year, including mobile’s growing role as a part of e-commerce transactions, including mobile food ordering, and more.

It also mentioned Amazon Alexa’s rise, in terms of its mobile app’s presence on the app stores. For example, App Annie said that downloads of the Amazon Alexa companion app trended upwards after the October 2016 release of the sub-$50 Echo Dot, with other big spikes around the holidays and Amazon Prime Day.

The report says these same trends will continue next year, with spikes around sales holidays and other device deals, like the recently release of the $49 Google Home Mini.

The full report is available from App Annie’s website.