The application economy became 171 billion dollars

The annual State of Mobile report published by app intelligence company data.ai showed that consumer spending on apps on the App Store, Google Play and Chinese app stores grew by three percent in 2023 compared to the previous year, reaching reached 171 billion dollars. A growing share of total consumer spending has come from apps rather than mobile games, partly influenced by TikTok’s success. However, app downloads remained stable last year at 257 billion, an increase of only about 1% compared to 2022.

The steady growth of the app economy has hit a post-coronavirus slump in 2022, as consumer spending normalizes and the recession prompts more people to save money, according to Aetna from ISNA. But last year, everything moved in a positive direction again.

Consumer spending on non-gaming apps will grow 11% year over year to $64 billion in 2023. Social apps and the content creator economy drove this growth, and TikTok helped lead them. Last year, for example, short video app TikTok hit a new milestone of over $10 billion in lifetime spending, becoming the first non-gaming app to reach this milestone. For this year, data.ai predicts that revenue from consumers in social apps will grow 150% to $1.3 billion.

Elsewhere, more than 1,500 apps and games generated more than $10 million in annual revenue in 2023, while 219 apps exceeded $100 million in revenue and 13 apps exceeded $1 billion. Four new apps, including Royal Match, Google One, Max and Gardenscape, reached $1 billion a year.

The company also noted that advances in artificial intelligence contributed to consumer spending growth last year. The generative AI application market expanded sevenfold, leading to new consumer experiences such as AI chatbots. The top apps in terms of consumer spending were ChatGPT, Ask AI, and OpenChat. Data.ai noted that the popularity of AI applications was almost universal, but the sector did not rank among the top sectors in China, Japan, Saudi Arabia and Turkey.

Last year, in terms of app installation, China ranked first, followed by India and America. Bangladesh emerged as the fastest growing market. The subcategories of apps included things like utilities, productivity apps, shopping, entertainment, and photo and video.

Data.ai also reported that hours spent reached 5.1 trillion, up 6 percent year-over-year. It was predicted that the cost of mobile advertising this year will reach 362 billion dollars, which was an eight percent annual increase. The forecast for 2024 will see an impressive 16.2% growth to $402 billion as ad spending recovers from slower growth in 2023.

Meanwhile, in the top 10 markets, the average daily hours spent on mobile per user grew by 6% to more than five hours by 2022. Applications like YouTube, WhatsApp, Facebook, TikTok, Chrome, Instagram, Netflix and other applications contributed to increase the time spent.

However, mobile games did not perform well in 2023, with spending on them falling 2% year-over-year to $107 billion. Game downloads were almost in line with previous years and included 88 billion out of 257 billion total downloads.

According to the website TechCrunch, the top app in terms of number of installs and spending worldwide was TikTok, but Facebook remained in first place in terms of time spent.