How Mobile Market Users Are Changing Worldwide
Today’s global app market is a story of two tiers.
Organic downloads are decreasing throughout mature mobile markets. In the US, less than half of users download more than one app per month. Developers also need to reach those users faster. Ross Sheil, Twitter’s former head of mobile, once concluded that a game typically reaches 90% of its addressable install market in 90 days versus 180 days three years ago.
However, emerging markets tell a different story. According to AppAnnie, India, Indonesia, and Brazil are expected to drive global downloads until 2021 and lift mobile revenue to $139 billion — 50% over the size of today’s market. India has already surpassed the US in app downloads, ranking second worldwide, just behind China.
To help developers build games and advertise for shifting markets, we’ve created this brief overview of important changes in key countries over the past several years.
Five years ago, the average smartphone owner in the US spent an hour every day on apps. Today that number is five hours per day, more than time spent watching traditional TV. Yet Adobe observes that app installs have steady declined by 40% since 2014. American users are largely past their experimental phase; many prefer long-term relationships with the few apps they truly love.
Leading Western European markets such as the UK and France are slowly following the US trend, according to Adobe Insights. App installs in the whole European region have declined by 5% in the past five years.
The world’s largest app economy is divided into two markets. First-tier cities such as Beijing and Shanghai are driving revenue as users spend more in their most commonly used apps, while lower-tier cities drive download and smartphone adoption in the country. From December 2017, active Android and iOS users in lower-tier cities increased by 61% and 48%, respectively.
How are devs responding?
As users in first-tier markets settle into a handful of apps, developers are shifting their focus to retention and engagement. “Usage is the new currency for the app economy, not downloads, because downloads just tell you that first part of the story,” shares App Annie’s head of research, Danielle Levitas.
To increase usage (and monetization) stats, even established casual game developers are using more core mechanics. “As the user acquisition costs have risen and the mobile games market gotten extremely saturated, games with low monetization and thus low player lifetime values (LTV) have started to incorporate mid-core mechanics into their games,” writes Michail Katkoff, a member of Rovio’s product management team.
India is on the fast track to an explosion in app downloads, thanks to several factors. Smartphone adoption rates have surged by 14%, bringing in a mass of new users who spiked app downloads by 215%. These excited new smartphone owners cycle between an average of 40 apps a month. Improving infrastructure and competitive data pricing is also bringing more players online. Indian game developers like Nazara Games report over 50% of their new user base is attributable to a particular telecom operator, Reliance Jio, that is working to make mobile data more accessible and affordable.
Along with India, Indonesia is predicted to fuel the next stage in smartphone adoption. The world’s largest archipelago is expected to become the fourth biggest smartphone market by 2018, following China, India, and the United States. A burgeoning middle class and a mobile-first attitude make the country fertile ground for app developers. Nearly all of the country’s Internet users access the web via their mobile devices, giving developers easy access to some 67 million smartphone users.
How are devs responding?
Businesses and developers alike are looking into emerging countries as a source of new traffic. Chinese developers already accustomed to low ARPU are among the first to succeed in Southeast Asian countries, which drove a 10% growth in downloads on Google Play last year.
Other established developers are testing ways to surmount monetization and usage barriers. Google is courting bandwidth-sensitive Indian users with apps such as a low-bandwidth version of YouTube and a data usage management app called Datally. Bandai Namco is partnering with Japanese telco Docomo to reach countries where carrier billing, not credit cards, are the main method of mobile payment.
One of the most persistent trends, whether in developing or developed markets, is the shift of consumer spending to mobile. Online travel apps, for instance, report that 85% of travelers now plan trips online, and many follow through to purchase.