Mobile App Devs See Revenue Skyrocket

You might find it hard to believe this, but people spend a lot of time on their smartphones.

According to new data from App Annie, worldwide mobile-app downloads increased by 15 percent between 2015 and 2016. That rise was accompanied by a 25 percent boost in the amount of time people spend in apps. And app publishers benefitted, to the tune of a 40 percent increase in revenue paid out via the Google Android and Apple iOS platforms.

“The global revenue growth rates for both the iOS App Store and Google Play were greater in 2016 than 2015,” App Annie added. “Gaming continued to drive the majority of app store revenue and one of the biggest headlines of 2016 was the phenomenal success of ‘Pokemon Go.’”

Revenue from Apple’s App Store grew 50 percent last year, making it the highest-generating platform (and outperforming Google Android). That’s thanks in large part to China.

For developers, app downloads are just the beginning. Over the past few years, a variety of alternative revenue models have emerged, including subscriptions and in-app purchasing. Now it’s no longer about just racking up as many downloads as possible; developers and software firms must focus on ways to keep customers engaged and paying for months or years to come. In “mature” app markets such as the United States, these models become more important as the download growth rate inevitably levels off.

The burgeoning category of mobile retail could have an outsized effect in years to come, as well. Mobile accounted for 44 percent of retailers’ online traffic last year, according to App Annie.

For tech pros, there are a few takeaways from all of this. Given how difficult it is to retain active app users, it’s imperative for developers from all categories to consider subscriptions, feature add-ons, and other ways to keep people coming back; the job doesn’t end once version 1.0 of your app hits the App Store. Fortunately, Apple and Google shifted last year to more subscription-centric revenue models; for example, Apple allows apps in any category to adopt a paid subscription model, and gives developers a more generous cut of app revenues if users stay subscribed for more than a year.

That means, as developers, it pays to think through what your users will pay for, in terms of those subscriptions and add-ons. For game-makers, it could be something as simple as new playable characters; for those with more of an enterprise focus, anything that improves the power and functionality of their app. The current mobile paradigm demands long-term thinking from those developers who want their app to endure longer than a few weeks. Don’t stress!