On February 17, we hosted a webinar looking at 2015’s top app trends, as covered in our 2015 Retrospective. We received a lot of great questions — 100, in fact! Since we couldn’t get to them all during the webinar, we went ahead and selected four that we think will be important as we move deeper into 2016.
If you missed the webinar, you can view it here. Have questions about the app economy you want answered? Join us this Wednesday, March 9 as we look at the trends that will impact mobile apps going into 2020.
Q: What do you think is the future for wearable technology? Also, do you have any insights about apps that connect to hardware?
A: Connected devices are already quite widespread for the Media (Chromecast), Productivity (HP ePrint, Square Register) and Health & Fitness (Fitbit) categories. We expect competition for developer attention to increase throughout 2016.
For wearable devices to achieve long-term and mass market success, developers need to find innovative ways to leverage wearable form factors and deliver benefits that today’s smartphones cannot provide on their own. This may include vertical-specific use cases — such as monitoring operations of staff or equipment — or augmenting the physical world with relevant information. They also have to succeed in finding ways to maintain long-term engagement.
The communal nature of Apple TV allows for multi-user experiences and engagement. Apps made for TV screens may have increased monetization from both higher store revenue and diverse CPMs from advertisements that target multiple simultaneous viewers of the same TV.
Virtual and augmented reality need more time to develop, but it will be interesting to see what advancements are made in 2016.
Q: What about China’s revenue in comparison with the United States? In particular, Entertainment and Games?
A: China is the largest smartphone market and many Chinese consumers view their smartphones as their primary computing device. China already surpassed the US in iOS downloads in 2015, and the revenue gap is closing as well. (In fact, China iOS game revenue was about 70% of US in 2015, while the US was much further ahead in Entertainment.) Once factoring in all app stores, including third-party Android stores, China is on track to surpass the US in gross app store spend to become the largest single app market in 2016.
Q: Do you see app monetization potential outside gaming, dating or the ‘xyz’-sharing economy?
A: Video– and music-streaming services truly shined in 2015, with noticeable growth coming from HBO NOW, SHOWTIME, Netflix, YouTube and Spotify. Outside of streaming services, we also expect advertising to move more from mobile web to apps, with contextual advertising leveraging notifications.
Retail and m-commerce are also showing a shift toward mobile. About 25% of downloads from the top 10 retail apps came from mobile-first companies in the US and UK in 2015, and download growth among the top 10 retail apps from 2014 to 2015 outpaced the overall app market in the US, UK and Japan.
Q: Website vs. Official App: When do you think apps will overtake websites in Entertainment and Retail? Will this happen in the near future?
A: We are spending more and more time — and money — in apps. They’ve become a critical mechanism to deliver improved user experiences and new market paradigms to nearly every aspect of our lives. While the mobile web has played a role for publishers that have yet to build an app, or for app publishers to onramp customers that have yet to download the app, the reality is that apps deliver a superior user experience compared to the web. As smartphone screens get larger, they are increasingly likely to absorb streaming time from other devices like PCs and TVs. Tablets also contributed to this.
For retail, basket size and conversion rates on mobile apps tend to be higher than in browsers (both desktop and mobile). Having a mobile app also makes it easier to retain customers. In addition, smartphones are introducing the internet to billions of first-time e-commerce customers. For these users, apps will be their primary interface.
Of course, this does not mean that websites or the mobile web are dead. An omnichannel strategy is still important to meet customers at every potential touchpoint.
Q: What percentage of app store revenue was games in 2015?
A: About 80% of combined iOS App Store and Google Play revenue came from games in 2015, so games are still the biggest players in mobile app store revenue. This percentage varies by country, as over 90% of game revenue came regions like China, Japan and South Korea.
Q: Do you see different trends between iOS and Android when it comes to music streaming apps? How about across the US and worldwide?
A: We see less of a device difference and more of a regional difference when it comes to music streaming. Pandora leads in both revenue and monthly active users (MAU) in the US, while Spotify has more of a global reach. Even then, individual markets frequently have their own local leaders. Saavn and Gaana were big winners in India, MelOn, was big in South Korea, and QQ Music leads in China.
The category has seen healthy development due in large part to improvements in country network infrastructures and cloud storage. We’ve also noticed that music curation and discovery are essential components of long-lasting apps.