App economy will be worth $6.3 trillion by 2021: Study
People now access the Internet, make more digital transactions using their smartphones as against laptops and in order to do that, they need dedicated apps. According to app analytics firm App Annie, this will make the worth of global app economy take a significant jump from the $1.3 trillion that it was last year to $6.3 trillion by 2021. Here's all about it.
Factors taken into account
The survey took into account the revenue generated by the app stores along with other monetization sources like in-app ads and mobile commerce to derive this conclusion. The report cites that by 2021, apps' user base would double itself from today's 3.4 billion to 6.3 billion and time spent on apps will rise from the 1.6 trillion hours, noticed in 2016, to 3.5 trillion.
How much do app users pay?
Around $379 is spent in apps across three forms of monetization by 3.4 billion app users. That is $0.80 per hour, per person. This will become $1,008 per user by 2021. This figure varies from market to market. While the US and China generate $2.36 and $2.01 per user, per hour, respectively in apps; Japan generates an average of $13.98 per user, per hour.
The western market will fall behind
App Annie believes, this growth will be propelled by the increase in digital transactions. However, according to its estimates, the western market will fall behind in this shift, as they're bogged down by legacy systems for things like food purchases and banking. Moreover, in the west, the majority of wealth remains in the hands of older population which is late to adapt to mobile.
Why will the developing markets thrive?
Developing markets will shift easily, as they lack legacy issues and their infrastructure is being built around a mobile generation. The biggest driver of growth for app economy will be the rise in mobile commerce, which will reach $946 by 2021 per user from the $344 that it's now. Asia will be the quickest in this race and will reach $3.2 trillion in 2021.
App store spending will rise considerably
Spending in app stores will rise 18% and reach $139 billion by 2021. Although Google Play is expected to topple iOS App Store this year, App Annie believes that iOS App Store will remain the largest store in future, growing to over $60 billion. Revenue from games, which are the primary purchases in app stores, will grow to $105 billion in 2021.
