Tuesday, May 2, 2017

App stores reach record Q1 (AAPL)

App stores reach record Q1 (AAPL)
By Laurie Beaver

Global Mobile App RevenueBI Intelligence

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Mobile app stores — the iOS App Store and Google Play — saw a record-breaking quarter, according to App Annie. Downloads grew 15% YoY during Q1 2017, reaching 25 billion downloads globally, and consumer spending was up 45% YoY to $15 billion in Q1 2017.

Although Google continues to dominate global app downloads, Apple is growing its lead over Google in terms of revenue generation. Global downloads for Google Play increased 20% YoY compared with the iOS App Store, which grew just 5% YoY, lengthening its lead over Apple to 135%. Nevertheless, the App Store saw a 45% YoY increase in consumer spending, compared with Google Play’s 40% YoY growth. The App Store now leads Google Play in consumer spending by 100%, up from 90% in Q1 2016. 

Despite Apple’s more lucrative platform, Android may still be an attractive option for publishers and developers moving forward. Here are several points to keep in mind:

  • Android has more of a global presence. According to recent figures reported by Gartner, 81% of smartphones shipped in Q4 2016 ran Android, compared with 17.9% for Apple.
  • Android is generally more accessible. Last year, the average selling price for phones running Apple iOS was $691, while phones running Android averaged $215, Fortune reported.
  • Android is projected to top iOS in revenue for 2017. Another recent report from App Annie predicted that 2017 would be the first time Android app revenues top iOS. However, this projection also includes Android third-party app stores from vendors such as Tencent, Baidu, and Xiaomi.

Because of this, brands looking to capitalize on increasing app usage in emerging markets may be wise to develop an Android experience. As consumers in emerging markets become more comfortable making in-app purchases, Android developers could be well positioned to reap the benefits.

App developers long considered the "pay once and play" model — in which users pay up front an app and aren't prompted to make in-app purchases — the best way to generate revenue. But as more "free-to-download" apps entered the market, users increasingly opted for these experiences. These apps offer microtransactions for in-app goods and services, and in-app ads.

As the app ecosystem expands further, it will become increasingly challenging for developers to compete in a crowded market. Overall, global gross app revenue will double to reach $102 billion by 2020, according to recent projections by App Annie. As a result, app monetization strategies need to shift at least as quickly as consumer trends and preferences in order for developers to capture a piece of this growing market.

Laurie Beaver, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on app monetization that explores the top app monetization strategies under user- and advertising-paid approaches, and the growing combination of both. We will also look at emerging trends that could help developers navigate the fiercely competitive app ecosystem, and address the potential barriers that developers will have to overcome to reap the benefits of the multi-billion dollar market.

Here are some of the key takeaways: 

  • The app ecosystem is expanding quickly, and it's becoming increasingly challenging for app developers to compete in a crowded market. 
  • To capture a piece of the growing market, app developers must adapt their strategies at least as quickly as consumer trends and preferences change. 
  • Developers can choose a user-paid or an advertising-paid approach to monetizing their apps. Different monetization strategies work best with different apps.
  • There are a number of widespread challenges that developers must contend with both before and after they enter the app market.  

In full, the report:

  • Provides key factors driving the expected growth of global app revenue
  • Evaluates the top app monetization strategies
  • Looks at emerging trends to help developers navigate the app ecosystem
  • Explains the challenges that developers face to compete in the app market
  • And much more

Interested in getting the full report? Here are two ways to access it:

  1. Subscribe to an All-Access pass to BI Intelligence and gain immediate access to this report and over 100 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. » START A MEMBERSHIP
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May 2, 2017 at 09:20AM
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