Mobile app store spending to jump 30% in 2018

Brief:

Consumer spending among all mobile app stores will rise 30% to more than $110 billion in 2018 from a year earlier, researcher App Annie forecast in a report made available to Mobile Marketer. Games will maintain their dominance in total spending, but spending on other kinds of apps, including retail, is predicted to grow faster due to a shift toward subscription-based revenue models.
Mobile platforms will make a greater push into becoming a full-fledged shopping platform instead of a research companion for product information, prices and reviews, App Annie said. U.S. and U.K. consumers spent an hour a month on average in shopping apps this year, and that usage will grow as retailers integrate their mobile apps with in-store experiences.
Netflix, Apple, Google, Facebook, Snap Inc. and Disney are among the companies that will drive more fragmentation of the video streaming market to feed a growing demand for content on smartphones, per App Annie. The share of iPhone users who have four or more streaming apps on their phones grew to 31% this year from 25% in October 2016 as consumers seek a wider variety of video content.

Insight:

App Annie’s forecast for 2018 holds nuggets of insights based on the in-app spending and downloads it tracks. The retail industry will increasingly become less segmented between traditional categories of "digital-first" like Amazon and eBay, and "bricks-and-clicks" like Walmart and Target.

One key driver lies in the growth of mobile payments, as Western countries will become more like China, where cashless mobile commerce is becoming increasingly popular in major urban centers, App Annie said. Several tech companies and retailers like Apple and Walmart are ramping up efforts to integrate mobile pay options in the $49 billion market that's faced some difficulty gaining traction among consumers. For shoppers, enhanced mobile apps could lead to people using physical stores as a place to pick up items purchased on smartphones, while cash registers will gradually lose their role in the checkout and payment process as mobile solutions become more prominent.

On the interactive app front, mobile programs that use augmented reality (AR) are set to jump in popularity in the coming year as developers use the new software tools that came out this year that could make the emerging tech more accessible. App Annie saw a surge in iPhone app downloads in the AR category in September after Apple released its latest mobile operating system to support the tech.

Voice-activated digital assistants also will also likely become increasingly popular as more tech companies offer devices to compete with Amazon Echo and Google Home. Apple, Samsung, Alibaba and Baidu are among the companies that seek a greater share of the in-home device market, App Annie said. The most popular applications for the devices will likely be consistent with past uses such as listening to music, web searches and basic tasks that are becoming increasingly more complex and useful for consumers.