Fastest News Updates around the World

App Downloads Decline as Competition Grows: An Analysis of the Trend and Its Impact on the App Store Revenue

83

- Advertisement -

Concerning Trend: App Downloads Decline as Competition Grows

There’s a concerning new trend taking place on the U.S. App Store which is impacting companies large and small: many apps are seeing their downloads decline, even as overall App Store revenue grows. The data, which comes from app intelligence firm Appfigures, suggests that some of the biggest apps on the market are slowly losing their appeal in the face of increased competition, pulling overall app installs down.

Limited Impact on Big Apps

This trend is not happening at a scale large enough to dethrone the big apps, however, the firm tells us. For instance, Facebook remains one of the most downloaded apps every month. But it is enough of a slowdown to have some sort of impact.

About the Analysis

The analysis here is limited to the U.S. App Store and was measured using Appfigures’ Mobile Market Index. This index tracks the downloads and revenues of the top 25 apps in each category and country and then compares that to the date of Jan. 1, 2018. This results in a value that allows it to track app growth over time.

Declining Download Index

Last year, the Mobile Download Index, which tracks app installs, was 91.87. That figure means downloads were already down versus 2018 data, but not by much. As of August 31, 2023, the Index had dropped to 83.59 — that’s a drop of 8.28 points, or 9% lower than where it started, indicating a worsening trend.

The Download Index had been falling over the past year, though it bumped up again in December 2022 — typically a big month for new app installs as the holidays bring new phones to unwrap and users with a lot more downtime to try apps, as they take time off from work. But those gains were over by this April when the Index fell as low as 64.50 points, the data shows.

Category Impact

Still, the decline in installs doesn’t impact every category, the firm told us. For instance, the sports streaming apps that have rolled out over the past few years are still growing their base, medical apps are growing in popularity and business apps remain somewhat evergreen, Appfigures said. Education, shopping, travel, and productivity apps are also out of the red for the time being.

On the flip side, news, games, and entertainment apps all saw double-digit drops, most likely due to market saturation. And many more apps across the board were seeing declines, not growth.

Reasons Behind the Decline

“I think the main reason is that the big apps slowly losing their appeal as new entrants come in,” explained Appfigures co-founder and CEO Ariel Michaeli as to why the Download Index was falling. “Acquisition has also become hard thanks to App Tracking Transparency, but I don’t think that’s the primary driver behind this,” he added.

Changes at the Top

It’s true the top of the App Store has started to look different in recent months, as Meta’s grip on the top Overall apps has loosened, leaving room for others like Bytedance’s TikTok and CapCut, China-based shopping apps Temu and Shein, and others. As of the time of writing, only Meta’s Threads has a spot in the top 10 free non-game apps on the U.S. App Store at No. 2.

Positive Growth in App Revenue

But it’s not all bad news for the app economy. App revenue in the U.S. has been growing despite the decline in installs as developers turned their attention to monetization. Last year, the Mobile Revenue Index was 363.13 — much higher than in 2018. As of August 31st, it’s higher still, at 458.3, or 122.17 points (36.4%) higher than where it started.

The category with the most revenue growth over the past year was Productivity apps (up 69.3%). In games, Board games rose the most, growing by 584.9%. Only four U.S. App Store categories saw revenue declines last year, in fact, and all were in games — Sports, Racing, Music, and Action.

Almost every other category in the App Store saw revenue grow last year, Appfigures said.

Leave a Reply

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More