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. Using Sensor Tower Store Intelligence data, our latest market forecast, available now, analyzes the long-lasting effects of the pandemic on consumer habits as well as how markets across the globe will evolve in the next five years.
In-App Spending Will Experience Stable Growth
COVID-19 supercharged global consumer spending in mobile apps during 2020, which climbed 30 percent year-over-year to $111 billion. While Y/Y growth in spending will return to pre-pandemic levels over the next five years, gross revenue on both app stores will continue to climb each year with a 19.5 percent compound annual growth rate (CAGR) to reach $270 billion in 2025.
According to Sensor Tower’s forecasting, the App Store will see a CAGR of 21 percent through 2025, reaching $185 billion annually. Consumer spending on Google Play is projected to experience a 17 percent CAGR, hitting $85 billion annually within the next five years.
Consumer spending in the United States will grow at a slightly slower pace than the global trend, climbing to $74 billion in 2025 at a CAGR of 17.7 percent. The U.S. App Store will experience a CAGR of 19.6 percent and Google Play will climb 14 percent to $51 billion and $23 billion, respectively.
First-time Downloads Will Grow Consistently
First-time downloads achieved their highest growth since at least 2016 in 2020, surging 24 percent Y/Y to 143 billion. 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.
Global app installs across both marketplaces will see 10 percent CAGR, reaching 230 billion in 2025. Google Play will surpass the combined CAGR, growing 11.5 percent to 187 billion, while the App Store will experience a CAGR of 4.6 percent and reach 43 billion.
Although installs on Google Play will grow at a greater CAGR globally, in the U.S. the inverse is true, with the App Store experiencing a 5.2 percent CAGR to reach 10.6 billion downloads in 2025 while Google Play will grow 1.9 percent to 6.3 billion. The two marketplaces combined will see a 3.8 percent CAGR to reach a total of 16.9 billion in 2025.
App Store Spending in Non-Game Apps Will Overtake Mobile Games
Consumers spent twice as much on mobile games than on non-game apps in 2020 on Apple’s App Store. However, that will change in 2024 when Sensor Tower forecasts that spending in non-game apps will reach $86 billion compared to $73 billion in games. By 2025, non-game apps will widen their lead even more, reaching $107 billion while mobile games will reach $78 billion.
Driven by the success of the subscription model, growth in App Store revenue in non-game apps over the last five years has outpaced that in mobile games. Consumer spending in non-game apps increased 4.7 times between 2016 and 2020, while it doubled in mobile games.
Europe Will be the Growth Leader in Spending
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.
The United Kingdom will continue to lead the region in spending on the App Store and Google Play, climbing 181 percent from $2.9 billion in 2020 to $8.1 billion in 2025. Among the top 10 European countries by consumer spending, the Netherlands will see the most growth, surging 210 percent from $495 million to $1.5 billion.
The Mobile Ecosystem Will Continue to Thrive
The mobile marketplace has shown incredible resilience during an unprecedented global pandemic that led to a surge in both first-time installs and consumer spending. Over the next five years, the ecosystem will continue its strong performance and experience enormous growth.
For more analysis, including key insights on specific markets and categories, download the complete report in PDF form below: