In case there were still any doubts, we now have more proof than ever that the app business is as strong as it’s ever been $89 billion strong, to be precise.
That’s the finding of a new report from app analytics firm App Annie, which said that usage, downloads and revenue were all up significantly in 2016, compared with the previous year.
That runs counter to reports that came earlier in 2016 that led some onlookers to suggest the app business was on the decline. We now know that’s not the case.
Let’s start with revenue. Developers worldwide raked in more than $35 billion in 2016 across the App Store and Google Play, App Annie reports. But, when you factor in revenue from advertising and third-party app stores, the total shoots up to more than $89 billion, according to the firm.
Now, let’s look at downloads, a metric that caused much hand-wringing in some circles after a report in June which, citing numbers from competing analytics firm Sensor Tower, suggested app downloads were on the decline.
But downloads are, in fact, on the rise, growing 15 percent in 2016, compared with the previous year. This growth is mostly due to China, according to App Annie’s researchers. The report notes that the U.S. market is maturing, which does cause downloads to slow as users “become more engaged with their go-to apps.”
Finally, as you can expect with downloads and revenue on the rise, app usage also saw huge spikes in 2016. “Total time spent in apps worldwide increased by over 150 billion hours year over year, reaching nearly 900 billion hours in 2016,” the report says, with time spent on apps in the United States growing by 25 percent.
All this should come as pretty good news for developers and help put to rest concerns about whether apps can remain a sustainable business.
That’s not to say that there aren’t issues with app store economics. For instance, data shows that the vast majority of App Store and Google Play revenue is going to game developers, and makers of non-gaming apps have historically had a much harder time generating the amount of revenue of their game-producing colleagues.
And, as we noted back in June, downloads in the United States and other “mature” markets are growing at a much slower rate than in previous years. But this is not as much of a weakness as it may seem. Android users in the U.S have still downloaded more total apps from Google Play than any other country, the report notes.
So, yes, the app market is doing just fine.