Coronavirus effect will see consumer app spending double over 5 years

PHOTO: Reuters

The surge in app downloads during the global coronavirus pandemic will lift all geographic markets for a "prolonged" period, driving a doubling in consumer spending on apps over five years, according to forecast published Wednesday by analytics firm Sensor Tower.

China's "massive increase" in downloads in 2020 will give a major boost to categories including games and education while the US will experience is own "spike in installs [this year] due to Covid-19," the company said.

China will lead the mobile app market in terms of in-app purchases on the App Store through to 2024, followed by the US and Japan, all of which will see a compound annual growth rate greater than 10 per cent over the period.

Consumer spending on mobile apps on both the App Store and Google Play is expected to reach US$171 billion (S$245 billion) by 2024, double the amount from last year, Sensor Tower said.

However, the regulatory environment in China makes it a "difficult market to predict," it added.

Beijing has already blocked Google Play, which will account for more than 32 per cent of in-app purchase globally in 2024, according to Sensor Tower.

The mainland Chinese market is fragmented into several smaller app publishing platforms, while the domestic Android smartphone giants, including Huawei, Oppo, Vivo and Xiaomi, are said to be building a Google Play alternative.

Besides competition, app developers also face strict censorship in China. Apple alone removed 805 apps at the Chinese government's request over the 12 months to June 2019.

Last month, Apple started requiring game developers to submit game licenses for their titles in the App Store in China in order for them to generate revenue. Some 20,000 iOS games could be affected.

Sensor Tower predicts that by 2024 the market will see more revenue generated from non-game apps.

On the App Store, the share of gaming revenue decreased from 82 per cent in 2016 to 68 per cent last year, and is forecast to shrink to 49 per cent by 2024.

For Google Play, the proportion is seen declining from 87 per cent in 2018 to 74 per cent in 2024.

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"Revenue from the entertainment, photo and video, and social networking categories is expected to grow by more than 230 per cent combined between 2019 and 2024," the report said.

"The continued growth of subscription monetisation will help spending in non-game apps reach US$58 billion on Apple's App Store in 2024."

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This article was first published in South China Morning Post.