2022 turned out to be a puzzling year for industry watchers as the mobile app market suffered a blip of 2%. However, 2023 came as a year of resurgence for the industry, with high performance expected to continue in 2024 as well. With myriad applications, from poker game apps to OTT platforms under its wing, the entertainment segment has been dominant in terms of consumer spending.
Mobile apps are a dynamic category in itself, powered by wave after wave of technological innovations. The booming gaming industry means that apps offering online rummy and poker games, rule the gaming scene. Just learn the basics of rummy and poker game rules and you can get started with it. Travel apps, on the other hand, made a comeback in performance as well.
Here’s more on the resurgence of the mobile app market in numbers.
The Resurgence in Numbers
Consumer spending in 2023 reached $171 billion, which is a 3% increase year-on-year (YoY). Mobile users clocked up 257 billion new app downloads, which is more than 489,000 downloads per minute. This is a threadbare increase of only 1% YoY, but an increase nonetheless.
The five hours spent daily per user on mobile is a 6% YoY growth, amounting to 5.1 trillion hours during the year. App store spending during the year was a 3% surge, amounting to $171 billion. The most crucial number was the $362 billion spent on mobile ads. This amounted to a respectable 8% YoY increase. Popularity in gaming, like poker game apps, is touted as a key factor behind the 3% increase in app store spending.
Sector Watch
A sectoral look at the growth of the app market reveals that entertainment apps contributed most of the growth, followed by the social media sector, utilities and productivity, books and references, and photos and videos. Also appearing in this growth is generative AI, which can be expected to grow rapidly in the years ahead. Generative AI grew by seven times YoY in 2023, with ChatGPT, Ask AI and Character AI leading the way.
When seen in isolation, mobile gaming was left wobbling in 2022 after the highs of the pandemic era. The importance of China means that the mobile gaming decline in the country has a significant impact on global numbers. However, in the rest of the world, mobile gaming spending showed a 4% growth, a sharp rise from the 11% decline in 2022.
Travel apps recorded more than 3 billion downloads in 2023, which is a 13% YoY increase, and surpassing even pre-COVID download levels of 2.2 billion in 2019. Termed revenge travel by dark humour enthusiasts, sub-segments like integrated travel, tour booking and flight booking saw 26%, 80% and 43% growth respectively.
Entertainment, a key major segment, soared 12% in terms of time spent and 10% in terms of spending.
Becoming More Tech-Enabled
While dips and rises are perpetual in any market or industry, the app makers are not resting on their laurels yet. App development continues to use technology and innovation to deliver improved user experience to the downloaders.
The role of AI and machine learning has been instrumental in this regard. Generative AI apps use large language models while learning apps like Duolingo use language models to impart linguistic education.
The spread of 5G in many parts of the world has revolutionised the way we use mobile apps. The high-speed, low-latency connectivity translates to faster downloads and a more immersive user experience. It has also facilitated the adoption of Augmented Reality in mobile usage, made streaming more effortless, and added a crisp third dimension to graphics. Take the Apple Vision Pro headset, for instance. It is an AR headset loaded with cameras and sensors that makes navigation possible through eye tracking, hand gestures, and Siri-guided voice commands. Futuristic gadgets made possible thanks specifically to 5G.
Better Than Ever UI
Thanks to all the innovations around app development, the user experience in mobile apps has entered an advanced level. Take micro-interactions, for instance. A seemingly small feature that can have a substantial covert influence on the user’s psyche. A micro-interaction can be the small animation in between the switching of pages or a little remark when you order on a food delivery app, for instance. These little additions make the app more engaging and the experience livelier.
For the app, it could mean better customer retention, a more effective call-to-action, and benefits across many finer details.
What to Expect in 2024
Going back again to generative AI apps, we can expect them to come out all guns blazing in 2024. Experts predict 2.3 billion downloads in this segment in 2024. Content-generating apps like ChatGPT are expected to see a 40% increase in app downloads.
Despite its absence in a major market like India, TikTok is expected to be the most profitable app of all time, surpassing Candy Crush Saga. Overall consumer spending is expected to rise by 4% during the year, surpassing $111 billion, led by the US, Japan, South Korea and Taiwan.
To sum up, we can expect encouraging levels of growth in the mobile app market in 2024 and a moderate growth trajectory in the coming years.
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