App Annie: Consumer mobile app spending reached $170 billion in 2021, a year-on-year increase of 19%

Consumer spending on mobile apps reached $170 billion in 2021, up 19% year-over-year, according to App Annie’s State of Mobile 2022 report released today. The report takes a comprehensive look at the app economy across Apple’s App Store, Google Play, and domestic third-party Android app stores.

The report shows that the number of app downloads in 2021 was 230 billion, a record high, but the growth rate itself is slowing down. In a report released in January 2021, App Annie reported that the year-on-year growth in downloads during 2020 was 7%, but it has dropped to only 5% in 2021. Last year's download growth was mainly driven by emerging markets such as India, as well as Pakistan, Peru, the Philippines, Vietnam, Indonesia and Egypt.

It’s also clear that consumers are spending more time in apps – in some cases even more than they watch TV. Across the top 10 markets analyzed for the study, the average time spent in apps in 2021 was over 4 hours and 48 minutes, up 30% from 2019. This includes averages for Brazil, Indonesia, South Korea, Mexico, India, Japan, Turkey, Singapore, Canada, the United States, Russia, the United Kingdom, Australia, Argentina, France, Germany and China.

Much of that time is spent in social, photo, and video apps, which accounted for seven of every 10 minutes spent on mobile in the past year. These categories, along with entertainment apps, are also attracting Gen Z users, especially in the United States.

In the U.S., the apps most used by Generation Z include Instagram, TikTok, Snapchat and Netflix. Meanwhile, Millennials prefer Facebook, Messenger, Amazon and WhatsApp. Generation X, now lumped into the baby boomer demographic, uses The Weather Channel, Amazon Alexa, NewsBreak and Ring.

This increase in time spent in apps has had a direct impact on consumer spending. In the United States, the lingering effects of the COVID-19 pandemic have forced users to shop, work, learn, play and entertain themselves from home over the past year. App Annie said this led to a "spectacular" increase in consumer spending, as the market added $43 billion in 2021, or $10.4 billion more than in 2020, equivalent to a 30% year-over-year increase – higher than the global average.

In terms of consumer spending, 233 apps and games generated more than $100 million in revenue in 2021, and 13 games generated more than $1 billion. This is a 20% increase from 2020, when 193 apps and games exceeded the $100 million mark and only 8 titles exceeded $1 billion in a year.

Outside of consumer spending, which includes paid apps, subscriptions, and in-app purchases, the broader mobile app market reached $295 billion in 2021, up 23% year-over-year, despite marketers' concerns about Apple's privacy changes and IDFA crackdown. In 2022, the market is expected to grow to $350 billion, helped by big events like the Beijing Olympics and the U.S. midterm elections.

New mobile app releases also grew in 2021, with publishers launching 2 million new apps and games, bringing the total number of apps and games ever released across the App Store and Google Play to more than 21 million. Of course, older apps and games were later removed over the years by publishers themselves or by the App Store during cleanups. There are currently 5.4 million "live" apps and games in the App Store, including 1.8 million on iOS and 3.6 million on Google Play.

Google Play also accounted for 77% of all new releases last year, the report states, while games accounted for 15% of all releases on both stores.

App Annie’s full report also provides in-depth research on individual app categories, including games, finance, retail, video streaming, food and beverage, health and fitness, social, travel, dating, and more.

From cnbeta