There is no doubt that we live in the age of the app. Globally, mobile phone penetration has exceeded 90% of the population, and even in the most remote parts of the world, the majority of people have some sort of mobile device. The biggest change in recent years has been smartphone ownership. As recently as 2016, just under half of the world’s population owned some sort of smartphone. Fast forward to today and that statistical approaches 84%, which corresponds to about 6.65 billion people.
The vast majority of smartphone users interact with apps on a daily basis. In younger demographics, well over half of their digital media engagement is through apps. In the United States, the average person now spends more time using apps than watching TV. The market is huge and continues to grow. On this page, we take a look at the current state of the Google apps market and see where it might go in the years to come.
What’s popular now
Statistics for 2021 show that the Play Store’s top app category was games, a trend that continued into 2022. The most recent figures show that games account for around 14% of all app downloads, followed by educational apps at just over 9%.
Gambling
Last year, Google partially reversed its policy regarding real-money gambling apps. After previously banning all casino apps except fun and social casino games, where no money is involved (directly), Google now allows them to 15 countries including the United States, depending on local license state. In Germany, gambling/casino apps have also seen expanded payment options like payments by code or card payments in the GPay as the EU pushes for the liberalization of payments in the green systems of the App Store.
There is currently no separate category for casino apps, so it’s unclear whether they fit into the games or entertainment group. Either way, these apps are likely to have a lower percentage of downloads because they’re not universally available.
Education, health and well-being
During the COVID-19 pandemic, app downloads surged as users looked for ways to spend time while confined to their homes. Education and entertainment services were boosted, as were health and wellness apps. Mental health has been a hot topic lately, and apps related to physical and psychological wellbeing have been downloaded more than ever in the past couple of years.
Financial apps
Business and finance are two very popular categories, together accounting for 13% of the market. Medical applications have also increased, with more targeted solutions being developed to help users manage chronic conditions such as diabetes. A perhaps surprising statistic is that dating apps, despite being highly visible and attracting a lot of attention, only account for 0.37% of Play Store downloads. Of these, Tinder takes the top spot.
Most downloaded app?
However, the undisputed champion for the past two years has been social video app TikTok. Since its launch in 2016, the download rate has increased exponentially, reaching 3.3 billion in 2021. While Facebook remains the most popular social media provider in the world with 2.9 billion regular users, TikTok has amassed 1.2 billion in a much shorter period of time. Whether this is a social app that’s here to stay, or just a passing trend, remains to be seen.
Turnover and profitability
The app market is incredibly profitable. Taking into account all users across all app stores, global revenue grew from $356 billion in 2018 to $462 billion in 2019. At the current rate of growth, it is expected that by the next year, the figure could be close to $950 billion, of which only more than $100 billion will come from the gaming sector. On the Play Store, only 3.3% of apps cost money to download, so where does the money come from?
App developers have a few options when it comes to making money from their products. Some decide to rely entirely on advertising for their income, but most have adopted the so-called freemium model. This approach takes various forms, such as users making in-app micro-purchases or paying for an ad-free version. Statistics suggest that users who are happy with a certain app are willing to spend money to get the most out of it.
To take a closer look income statistics shows that the most profitable application for Google Play is a social casino game called Coin Master. This game has a lot of features besides spinning slot reels, but coins and spins are the heart of the gameplay. These can be earned in other aspects of the game or purchased directly from the app store. Naturally, many players choose to pay for extra coins or spins, although it is possible to continue playing without spending any money.
TikTok is not far behind Coin Master in terms of revenue, bringing in $82 million from the Play Store alone in 2022. Advertising is the main source of profit in this case, although users can buy virtual coins and offer “gifts” to other users to show appreciation for their content.
Overall, gaming apps are the most profitable type – despite only accounting for around 14% of downloads, games generate around 80% of all profits.
Android and Google Play always on top
The Android operating system is the most widely used in the world, with a 72% market share in April 2021. The leading app store remains Google Play, with 3.5 million apps available for download in the first quarter of 2021. There were 2 .2 million in the Apple App Store over the same period. Other stores include Amazon, Windows, and BlackBerry, all of which fall below these numbers. Learn more about the February 2022 Google Play Update here.
Android’s market share is slowly losing ground to iOS as more and more users fall in love with Apple products. Even so, it seems unlikely that Apple will ever overtake Android as the leading operating system. Google is a politically unpopular brand in China, and the administration has chosen to ban the Play Store in the country. Rather than opting for Apple, however, users in China are opting for local brands.
Future trends
The app market shows no signs of slowing down. From banking to shopping, every day it becomes more and more possible to carry out most of our daily activities via our mobile phones. Currently, the majority of app revenue is only shared by a small percentage of vendors. This state of affairs will likely continue for some time, but in the next few years even small businesses are likely to include dedicated applications for their customers. We also expect to see more doctor-approved medical apps come to market as healthcare professionals recognize the value of these tools for patient care.
