Cheap Smartphones to Propel App Spending Past $100 Billion 

Worldwide mobile application store revenue is set to reach $101 billion in five years as smartphones become cheaper and data plans more accessible, drawing in people in developing countries, according to data provider App Annie.The user base of smartphones and tablets will more than double to 6.2 billion by 2020, up from 2.6 billion, the San Francisco-based company said in a forecast today. Some of the strongest growth will come from countries such as India, Indonesia, China, Mexico, Brazil and Turkey. Revenue generated per device will grow to $16.2 in 2020 from $15.4, boosted by spending in the Americas, Europe and the Middle East, even as average revenue will decline slightly in the fast-growing Asia-Pacific region.“Consumer time spent on mobile is steadily increasing and a greater share of wallet is being channeled through a mobile platform,” Danielle Levitas, senior vice president of App Annie’s research & analysis team, said in an interview. “There’s a level of maturity in over-the-top services, specifically for mobile apps.”Music streaming, video streaming and dating apps will lead the surge, boosted by better hardware and cheaper data plans, as well as expansion of services such as Spotify, Netflix, Tinder and China’s iQiyi. Baidu Inc.’s iQiyi, one of China’s largest video streaming services, doubled the number of paid subscribers to its Netflix-style platform to 10 million in less than six months to December. Games will continue to contribute the majority of spending, even as their share is forecast to drop to 74 percent from the current 85 percent.Levitas said some companies previously didn’t allow customers to sign up for subscriptions to services within their apps, because many stores take a 30 percent cut of such purchases. They “encouraged people to go through the browser” instead. “As they realized that there’s an opportunity that’s way bigger, and mobile is where people spend their time, they had to move there,” said Levitas.

Source: Cheap Smartphones to Propel App Spending Past $100 Billion – Bloomberg Business

Leave a Comment