How can app makers win in maturing and increasingly competitive markets like the United States?
Among other aggressive measures, they need to encourage new app downloads through product innovation and investment in organic and paid installs, according to the latest report from App Annie.
In emerging markets, high downloads and limited direct spend should make alternate strategies that rely on large user bases more effective.
In-app advertising is an obvious model, but having a widely used app in these markets could also be a boon for brand awareness and loyalty.
By 2022, countries in the Asia-Pacific region will account for 64.8% of app store spend, and 72.4% of global downloads. Not surprisingly, more than half of this business will come from China alone.
More broadly, the market for apps will continue to expand, with global consumer spend in app stores reaching $156.5 billion in 2022, App Annie now predicts. That’s up 92% from $81.7 billion in 2017.
Global downloads will grow 45% from 178.1 billion in 2017 to reach 258.2 billion this year, while global average spend per device is projected to rise from $20.94 in 2017 to $25.65 in 2022.
Growth in the Americas is being driven by large emerging markets like Brazil, yet overall growth in the region is tempered by the maturing U.S market.
Absolute downloads will remain high in the U.S., with an average of 21 new apps downloaded annually per device on in 2022.
Growing app availability combined with less frequent downloads will require publishers to invest more to acquire each new user. However,, rapidly growing spend in these markets will increase ROI on per-user lifetime value.
Growing spend per device in mature markets is the predominant driver for global increases in app store spend. As users increasingly rely on, and get value from, apps, their willingness to spend increases.
Alongside this, the global smartphone and tablet install base will increase by 56.4% from 3.9 billion in 2017 to 6.1 billion in 2022.In combination, this will fuel overall growth in consumer spend in apps, App Annie expects.