U.S. iPhone users will spend an average of $88 per year on premium apps and in-app purchases (IAPs) by 2020 according to a new forecast based on Sensor Tower Store Intelligence data. Our projections place calendar year 2019 per-device revenue at approximately 86 percent higher than 2016 and about 40 percent higher than our forecasted average user spend in 2017.
In this report, we break down this growth by year and look at which categories we project will account for the most per-device spending by the the end of 2019.
Our most recent estimates put 2016 per-device spending at $47. With 2017 nearing its end, we estimate that U.S. App Store users have already matched last year's spending and are on track to spend an average of $63 on premium apps and IAPs this year, an increase of approximately 33 percent over 2016.
Next year, we project that average app spending per active U.S. device will grow to $77, before reaching $88 by 2020.
We expect the majority of this spending to remain focused in the Games category, which will account for nearly 70 of all per-device revenue despite major growth in other top categories, such as Entertainment. Based on our models, we project that as much as $60 of the $88 we forecast will be spent in 2019 will go to premium games and game IAPs.
Based on current trends, we expect Entertainment to overtake Music as the second-largest category of per-device spending this year, thanks to apps such as Netflix and HBO NOW, and grow its share of the projected $88 in 2019 to more than 9 percent, or at least $8, up from $2.80 in 2016.
Our forecast is based on our estimated U.S. App Store revenue for January 1, 2012 through December 31, 2019 and our own proprietary model of active U.S. iPhone units for the corresponding time period. Figures stated are gross amounts spend by consumers before Apple's platform fee of 30 percent (15 percent for in-app subscriptions more than one year from initial purchase) and are not inclusive of taxes. Additionally, these figures do not include subscription or other IAP revenue from first-party apps and services such as Apple Music.
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