Global consumer spending on mobile apps estimated to reach $270 billion annually by 2025: Report

Global consumer spending on mobile apps is estimated to reach $270 billion annually by 2025, according to a report by Sensor Tower.

“Global consumer spending on premium apps, in-app purchases, and subscriptions across Apple’s App Store and Google Play will reach $270 billion annually by 2025, nearly 2.5 times what consumers spent in 2020 as Covid-19 accelerated mobile trends,” Sensor Tower said.

Accelerated by the Covid-19 pandemic, consumer spending in mobile apps increased by 30 per cent year-over-year in 2020 to $111 billion. While YoY increase in spending is likely to return to pre-pandemic levels over the next five years, gross revenue on both app stores will continue to grow each year with a 19.5 per cent compound annual growth rate (CAGR) to reach $270 billion in 2025, as per the report.

As per Sensor Tower’s forecasting, the App Store will see a CAGR of 21 per cent through 2025 to reach $185 billion annually while consumer spending on Google Play is likely to see a 17 per cent CAGR, hitting $85 billion annually within the next five years.

Apart from spending, first-time downloads which achieved their highest growth since at least 2016 in 2020 are also projected to increase significantly. First-time downloads increased by 24 per cent YoY to 143 billion in 2020.

“Although the pace of installs will slow as markets begin recovering from the pandemic, both the App Store and Google Play will continue experiencing stable Y/Y growth,” it said.

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Global app installs across Apple and Google marketplaces will witness a 10 per cent CAGR, reaching 230 billion in 2025.

“Google Play will surpass the combined CAGR, growing 11.5 per cent to 187 billion, while the App Store will experience a CAGR of 4.6 per cent and reach 43 billion,” as per the report.

With the increased spending on non-gaming mobile apps, consumers spending on such apps is likely to overtake spending on mobile games.

Spending on mobile games was twice compared to that on non-game apps in 2020 on Apple’s App Store. However, this is likely to change in 2024 as per Sensor Tower forecasts. Spending on non-game apps will reach $86 billion compared to $73 billion in games. By 2025, non-game apps are forecasted to reach $107 billion while mobile games will reach $78 billion.

This will be driven by the success of the subscription model. Global consumer spending will be led by European countries.

“Four European countries exceeded $1 billion in consumer spending in 2020, a number that will nearly triple by 2025. Over the next five years, 11 European countries will pass that milestone and the region will collectively reach $42 billion,” as per the report.