Mobile App Bubble Expanding Worldwide

App Annie says the bubble is expanding.

Mobile development is perpetually in a bubble: every week sees a flood of new apps, many created by relatively new development teams, seeking an audience that’s increasingly swamped with options (and unwilling to pay for most software). App Annie’s latest report flies in the face of conventional thinking about this bubble (which many onlookers fear will burst), but nonetheless points to an emerging trend.

Overall, the numbers show solid growth. In the third quarter of 2017 (Q3 2017), time spent using mobile services went up 40 percent worldwide over the same quarter last year (Q3 2016). Measured in the billions of hours, we’re now using apps roughly 325 billion hours per quarter.

Downloads are also up. Apple’s App Store and Google Play are up eight percent year-over-year, with nearly 26 billion downloads combined. As App Annie notes: “This number is particularly notable as it includes only new downloads and does not count reinstalls or app updates.”

Spending is likewise off the charts. From App Annie:

Even more impressively, worldwide consumer spend for iOS and Google Play combined experienced more than 3x the growth rate we saw for downloads. In Q3 2017, it reached nearly $17 billion with year over year growth of 28 percent. In addition, app usage continues to increase at a significant pace. Total time spent in apps worldwide among Android phone users grew 40 percent year over year coming close to 325 billion hours in Q3 2017.

App Spending App Annie
App spending, according to App Annie.

Worldwide, Not Stateside

The quarterly report is painted in broad strokes. Upon closer examination, it becomes clear that emerging markets are driving the download and spending trends.

India has remained the largest driver for Google Play downloads since Q4 2016 “by a wide margin”; year-over-year, Q3 2017 saw nearly two-fold growth in download figures. Vietnam and Indonesia were also instrumental to Google Play’s success, as both countries had double-digit download growth.

Apple iOS also saw increased downloads. In Q3 2017, it was an eight percent uptick versus Q2 2017, the highest quarter-over-quarter growth since the beginning of 2016. Apple was driven by China, where a bursting middle class (with cash to spend on smartphones) has outpaced similar demographic growth rates in the United States and Saudi Arabia. As App Annie notes, Saudi Arabia’s government recently eased restrictions on messaging services, which could help the platform further expand next quarter.

Video was a big factor in iOS and Android spending. Streaming services worldwide pushed year-over-year spending upward by 25 percent. Worldwide consumer spend in the ‘entertainment’ category jumped 30 percent versus last quarter on iOS, and a whopping 45 percent on Android. Unsurprisingly, iOS users spent more than their Android counterparts. App Annie says iOS users now spend double what Android users are willing to.

China was the catalyst for iOS spending growth. In Q3 2017, it was the largest spending market on the platform, and saw the best year-over-year growth. South Korea, where juggernauts such as Samsung and LG make their home, was Android’s largest spending market.

If there’s a takeaway here, it’s that localization should be something every developer and engineer considers as part of their app-creation strategy. “iOS and Google Play’s record-setting performance in Q3 2017 for both downloads and consumer spend clearly demonstrates that the already massive worldwide app economy is showing no signs of slowing down,” writes App Annie. “Between the continuing influx of new smartphone users in emerging markets to the increasing spend of more seasoned app users, mobile apps are still just scratching the surface of their overall potential.”

In other words, the mobile-developer pie is bigger than ever, and shows no signs of slowing growth. But developers will need to fight harder against more opponents in order to secure the attention (and downloads) they need.