The App market constitutes the sale of software applications that can be downloaded, installed, and run on mobile devices. More specifically, it refers to apps that can be downloaded from Apple, Inc.'s App Store and the Google Play store (or in the case of China, from stores such as Huawei AppGallery and Tencent Appstore) and which can be installed and run on iPhones and Android phones.
We track 20 non-game categories and 15 game categories that are found in both Apple Inc.'s App Store and the Google Play store.
We consider three different sources of revenue:
Revenue from in-app purchases (IAP) that comes from the purchase of features, upgrades, and subscriptions within an app
Paid app revenue from the one-time purchase of an app
Advertising revenue obtained from showing ads within an app
Our statistics include the revenue earned by developers and also the revenue earned by stores through commissions.
Apps that can be downloaded from major app stores such as Apple, Inc.'s App Store and the Google Play store, or in the case of China, from stores such as Huawei AppGallery and Tencent Appstore.
Apps that are run on iPhones and Android phones.
Apps exclusively offered by Microsoft Store and Amazon Appstore for Android.
Custom-made apps not available from any official app store.
B2B/C2C app sales of any kind.
Subscription revenues outside of in-app purchases (for example, Netflix and Spotify use their own payment systems outside of their apps).
Since the launch of Apple Inc.’s App Store in 2008 with around 500 applications, mobile apps have come to dominate the digital economy and have outpaced the demand for desktop applications. As of 2021, the App Store and the Google Play Store offer more than 5 million apps combined. In mainland China, where Google services are banned and Apple has lesser influence, many Chinese app stores have been able to dominate the market. Huawei, Oppo, and Tencent have the top three stores, together accounting for half of the Chinese market share. More than 20 other app stores compete for the remaining 50%. China has also captured the biggest share of the global app market revenue at around 40%. This is not surprising, given that most of the large population depends on apps for even basic payments and that digital wallet apps WeChat Pay and Alipay have evolved into super-apps, offering social networking, video entertainment, ride-hailing, medical appointments, and more. Worldwide, mobile games constitute the biggest chunk of the mobile app revenue at around 60%, followed by social networking at around 10%. Mobile games are expecting further innovations thanks to faster 5G networks, advances in augmented reality and virtual reality, and the introduction of blockchain technology, all of which combined could make the hype currently surrounding the metaverse more of a concrete reality. In terms of mobile games, however, China could fall behind, given the government’s current stance against computer games. The complete halt in new game approvals has led to the closure of thousands of Chinese game development companies. This current situation is reflected in our market forecast and will be updated according to new developments.
The data encompasses B2C enterprises. Figures are based on revenue from in-app purchases, revenue from the purchase of apps, and revenue from advertising, as well as the number of downloads for each app category.
Market sizes are determined through a bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use market data from independent databases and third-party sources, current trends, and reported performance indicators of top market players. In addition, we use relevant key market indicators and data from country-specific associations, such as smartphone users and mobile broadband connections. This data helps us estimate the market size for each country individually.
In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption. The main drivers are GDP/capita, level of digitization, and consumer attitudes toward apps.
The data is modeled using current exchange rates. The impact of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. The market is updated twice a year in case market dynamics change.