In brief
App Annie projected a US$189 billion mobile app market by 2020, with games accounting for 55% of app store revenue. Its 2016 report identified rising app usage and a growing smartphone and tablet installed base as key growth drivers.
In its latest report, App Annie forecasts that the mobile app market will reach US$189 billion in 2020, up 170% from last year's US$70 billion. Meanwhile, gaming apps will account for 55% of total revenue in mobile app stores.
However, while game publishers will continue to earn most of the revenue, advertising will drive the revenue share of non-gaming app publishers from 34% (US$24 billion) in 2015 to 45% (US$85 billion) in 2020. App Annie expects that, by 2020, in-app advertising revenue and app store revenue will each exceed their combined revenue in 2015.
App Annie attributes the growth in revenue from in-app advertising and app stores primarily to two key factors. The first is a significant increase in the time users spend on apps: it expects time spent using mobile apps to grow by 114% over this period, after doubling over the past two years. The second is that the global installed base of smartphones and tablets will double to 6.2 billion devices by 2020.
“Today, app publishers can come from any industry, extending beyond game studios and media and entertainment companies. Banks, retailers, airlines, ride-sharing services and government agencies are all releasing their own apps,” App Annie writes in its report. “To harness the exceptional growth of the app economy, publishers need to prepare to seize future market opportunities when developing business plans covering product launches, performance targets, overseas expansion and portfolio management.
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