Play Store growth projected to explode at four times the rate of Apple’s App Store

by: Kris CarlonFebruary 17, 2016
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A few weeks back I wrote a story with the headline that the Apple App Store has the money but that Google Play owns the future. Not everyone agreed, but the latest annual app report from App Annie begs to differ. App Annie projects massive growth in the app market to 2020, with Play Store growth four times stronger than App Store growth. Not only that, Google Play downloads are expected to triple by 2020, when the global app market is expected to break the $100 billion barrier.

Google Play downloads are expected to triple by 2020, when the global app market is expected to break the $100 billion barrier.

The report is very clear about the increasing importance of mobile apps in the future, stating that “all companies need to view themselves as app publishers irrespective of their mobile strategy,” noting that apps have become the primary way we engage with media, brands and each other. The report claims “usage is the new currency,” with app usage increasing by an astronomical 63% just between 2014 and 2015.

App-Annie 2020 app revenue growthApp Annie

Exploding download numbers

This increase in engagement will be accompanied by an increase in downloads as well as in revenue, but for very different reasons. Global app store downloads are expected to hit 284 billion by 2020, more than doubling 2015’s figures. This explosion of app growth will be facilitated by the mobile install base increasing from 2.6 billion in 2015 to 6.2 billion in 2020. As always, much of this growth will be, thanks to emerging markets.

Global app store downloads are expected to hit 284 billion by 2020, more than doubling 2015's figures.

App Annie earmarks Mexico, Brazil, Turkey, Indonesia, China and especially India as the markets to watch, forecasting a huge upswing in not only app installs but also app revenue in the years to come. As expected, the divide will largely follow the familiar format: Android will get the installs but Apple will get the money. This is because in the context of the research, where emerging markets tend toward lower-cost Android devices and Apple loyalty kicks in at the other end, Apple’s ecosystem is seen as being mature while Android is still in the rapid growth phase.

App-Annie 2020 app install growth App Annie

iOS will lose its edge in revenue too

The report defines a growth market as one characterized by a huge numbers of downloads but with relatively low engagement and revenue. This exploration phase is typically seen at the start of a user’s (or market’s) contact with a platform. Lots of downloading and trying things out, but without established app habits or “active user” status. As a market or platform matures though, users develop their stable of go-to apps and begin to use them more, downloading fewer new apps but increasingly spending more money to unlock premium features or subscriptions in the apps they favor most.

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But the established situation where Apple rakes in all the money and Android gives away free apps is not set to last forever. In fact, iOS is only expected to lead in app revenue until next year, when the combined revenue of Google Play and other alternative Android app stores will surpass it. Sure enough, Google Play’s progression means it will eventually surpass the App Store on its own, but that date lies outside the scope of the report. If Android follows the same trajectory as Apple on the path to maturity, as its much higher number of users start spending more, Google Play truly will own the future.

App-Annie app market revenue App Annie

New contributors of growth

But even within currently mature markets like the U.S., Japan and South Korea, download growth may be starting to wane but app revenue is still increasing. Again, it comes down to increased usage rates, facilitated by better and more intuitive app interfaces and experiences. App Annie cites Tinder’s simple swipe gesture as an an example and notes that the incredible array of sensors on mobile devices increasingly afford app developers the opportunity to learn more about usage habits, user needs and the best ways to make their apps more engaging.

best free android apps mobile gamingSee also: 15 best Android apps of 2016102

But eventually even revenue will plateau in mature markets, because users will have not only already discovered their core set of must-have apps, but will also be much more likely to have already paid for premium features or upgrades. Even the mobile install base will slow down, as most new sales will come from replacements, with only a small increase in the lower-end segment for new device activations. However, this saturation point will coincide with explosive growth in mobile commerce and advertising revenue and growing contributions from new areas like wearables, IoT, VR, AR, auto and TVs.

How often do you install new apps? How much do you spend on apps each month?

  • aaloo

    Lol. Google play revenue is not going to bypass App Store revenue anytime soon, ma boy. Adding in gazillions other stores outside of google’s jurisdiction for your comparison is stupid.

    • Stephen Sharp

      So, since Apple doesn’t allow alternative app stores, revenue generated by Android’s alternative app stores shouldn’t count because that wouldn’t be fair? Gotcha

      • cr4zyjay

        he’s an idiot. ignore him.

      • Goblin Shark

        I suppose an argument can be made that it’s not an issue of fairness but accuracy. Whenever you do a comparison you always do it like to like, right? You don’t compare Ford sales to every other carmaker’s numbers then make a pronouncement that Ford sales are doomed, do you?

    • Celso Rodrigues

      The point here is Android revenue as a whole…

  • saksham

    so…. i should be happy for google ?

  • Fartemis

    In 2020 I bet most android phones will still be stuck on 4.4

    • cr4zyjay

      In 2020 i bet you will still be as stupid as your avatar looks.

      • charlie Jason

        I think you have to calm down and start looking at matters more objectively, rather than allowing your affection for Android to drive you and throw insults around for no good reason.

      • Fartemis

        Wow, I guess my comment regarding android’s fragmentation problems really hit a sore spot with you.

        Your avatar is the pinnacle of f4ggotry!

  • charlie Jason

    Let’s be honest here, app store apps are on average way higher quality than play store apps,

    • cr4zyjay

      Let’s be honest here, app store apps are on average the exact same quality as play store apps. about 85 or even 90% of all the high quality apps you see and find on the app store are also on the play store. The remainder of apps not on the play store often end up on the play store between weeks and some months later anyway. Your misconceptions are bullshit. Whether you like it or not… the planet wants innovative and cheaper ways to be on a smartphone and android IS that answer.

      • charlie Jason

        Whoa, chill with the bullshit accusations man.
        I have used both Android and iOS in the past, am currently using a 6P, and have plenty of people around me who use iOS. I am speaking from personal experience, not rough guesstimates. Even if the same apps can be found on Android, oftentime they are not as polished and don’t run as smoothly as the ones on iOS. Since neither of us can really produce strictly unbiased statistics on which apps are “high quality,” I think we should just leave the argument here.

      • Goblin Shark

        Did you skip your medication today?

    • Celso Rodrigues

      I honestly don’t think the difference is that big anymore.

      Since Material Design was introduced there was a big step up in general quality.

      Of course some companies (like Facebook) are WAY behind on redesigning their apps, but still…

    • Naxx ENVY

      Hi 2010, care to come join us in 2016?

  • Goblin Shark

    I don’t install apps too often, but when I do I tend to pay for the premium version (if available) to avoid advertising. I think I’m in the minority, though. The Android users that I know never pay for apps, so they probably generate a lot of advertising revenue.

  • This is clearly aligned to the interest of app makers themselves, but not necessarily users. Most of us are starting to hate apps for many reasons. They can clog up our devices for this or that, when their only true main advantage might just be sandboxing, security or multi device display scaling capability. What we really want is for an AI or something else (like Siri, Cortana or Google now) to do better selection work for us. The way it’s truly evolving is that it might soon be possible to help us pick apps for the content we actually need. The way apps ‘force us’ to navigate the world really needs to change since it’s really all about content, not ecosystem, branded app or ‘walled garden’ anymore. The app quantification & ecosystem wars are over.

    We once worked with operating systems, but programs replaced them as the primary place we performed tasks, we’d work in MS Word or Excel, but, increasingly programs shifted into the background & into the cloud & Apps become the new ‘program’. When you visit the Microsoft envisioning center for example you get a glimpse into a world beyond this, where Apps themselves move to the background, information is at the right time & the right then place fills a frame, actual apps & the pipe become irrelevant, so it becomes just about what one ‘needs to know’.

    Architecture is under development, a world of deeplinked apps, of the internet of things, & smarter, thinner websites. The technology & structure is already here, but obviously monetisation has yet to be sorted. Once it is, we may actually see the future could be with three entirely new architectures. Even though apps may never go away completely, how we will use them, & our need for them could actually change radically.

    • Naxx ENVY

      TL:DR

  • Falenone

    I wish Google will clean up the app store from bullshit apps.

  • tiger

    Funny…kinda hard to beat Apple Store now that it also owns the wearable market. The BEST non-Apple smartwatch sold last quarter was NOT Android Wear, but Tizen. If Apple Watch continue to sell in the MILLIONS every quarter (5.1 mil last quarter), there is no catching up to the profits from Apple Store.