By now, mobile usage has outgrown desktops. In 2016, mobile entangled itself deeper and deeper into our daily rituals. Not just as an additional communication channel, but as a way of life. Based in Amsterdam, I bike to the office everyday and I am surprised at how talented the Dutch are at cycling through the urban jungle while checking their favorite messaging apps… Even more tellingly, have you seen a subway or a train during commuting hours in any city? Who do we have to thank for this evolution of our way of life? The little software packages that flourish on our devices: apps. They transport us into a world of opportunity, information and connection. Google Play and the iOS App Store were the doors that opened this revolution. Let’s have a look at what happened in the app stores during the past year.
What the numbers tell us about 2016
In 2016, the mobile market demonstrated a strong continued growth and level of maturity. The main barometers of the app industry health are Downloads, Revenue and Usage. These figures summarize how dynamic the mobile market is and how much the mobile revolution is continuing its expansion.
Downloads: Worldwide downloads for Google Play and iOS App Store grew by 15%.
Revenue: Revenue in the stores increased by 40% to $35 billion. Most revenue came from the Game category, representing 75% of total iOS revenue and 90% of total Google Play revenue. When we include advertising and revenue generated by the full app ecosystem, total revenue soars from $35 to $89 billion.
Usage: You are definitely not done seeing all these people looking at their phone. Users kept spending most of their time in messaging and social apps, but video (sports and live streaming) showed growth both in number of users and engagement. The average number of apps people use is around 30.
Geographically speaking, China took the lead in growth and revenue. Emerging markets also contributed strongly. This evolution is well in line with the growing sales figures of mobile devices in these regions.
The mobile revolution keeps disrupting traditional industries
Who has not heard of Uber, Netflix or Facebook? These titans are known for their apps, but they are much more than that. They are disrupting traditional business models and shaping new ways of experiencing services and media. Let’s have a look at video streaming apps. Youtube and Netflix (US) or Youku (China) are generating increasing revenue as video consumption shifts from TV to mobile devices. Supported by cheaper data plans and faster connections at home, these apps are taking over.
The retail industry is also seeing major shifts in consumption patterns. Black Friday and Cyber Monday sales in the US showed significant usage growth in 2016: users spent over 30% more time in shopping apps. Mobile retail is exploding all around the world. Mobile accounted for 44% of retailers’ online traffic and for 31% of their sales in the past year. Internet retailers predicted worldwide mobile retail sales will reach $220 billion in 2016. That's 50% more than in 2015.
Digital-first retail companies like Amazon and Bol.com capture an increasing part of global retail revenue. Their average number of monthly sessions per user is much higher than that of traditional retailers like Walmart or Albert Heijn. They must continue to invest in their app strategies to stay competitive. As more and more turnover is generated on mobile devices, expanding further into mobile becomes a critical move.
Europe’s retail banking apps are also booming. Mobile banking is becoming a second nature as millennial are driving up the number of sessions. Most banks are paving the way for further developments with successful apps as Tikkie (ABN AMRO), Bux (Investment), or Bunq.
What does this mean for you?
The mobile revolution is still going strong, and much more is on its way. The titans of today and startups of tomorrow are already busy working on augmented reality, artificial intelligence and bots.
Mobile devices are no longer just an additional communication channel. I believe they are going to continue to revolutionize the way we live. The best is yet to come! That’s why it’s critical to keep asking questions, to define your mobile strategies and to get experts to support you during this process. For customer satisfaction, mobile is where most opportunities lay ahead.
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