5-Year Market Forecast: App Spending Will Double to $171 Billion by 2024 Despite COVID-19

Consumer spending in mobile apps through Apple's App Store and Google Play will total close to $171 billion globally in 2024, double the amount spent in 2019, according to forecasting based on Sensor Tower Store Intelligence data. Our projections also show that the stores will generate a combined $102 billion in gross consumer spend during 2020, growing by about 20 percent year-over-year despite the impact of COVID-19 on global economies. These findings and more are part of Sensor Tower's 2020-2024 App Market Forecast, a sample of which is available now.

COVID-19 Impact to In-App Spending Will Be Minimal

We project that global consumer spending in mobile apps and games during 2020 will suffer only marginally as the result of reduced purchasing power brought about by COVID-19, compared to our initial forecasts for the year.

Prior to wide-scale shelter-in-place precautions and resulting economic impact felt around the world, our projections called for 21 percent Y/Y growth in user spending on in-app purchases (IAP) and premium apps across both stores combined, just one point higher than our revised forecast of 20 percent. This amounts to a difference of approximately $3 billion or 2 percent less than our original $174 billion projection. These revisions result in a compound annual growth rate (CAGR) of 15 percent through 2024 for total spending across both stores, compared to a pre-COVID-19 CAGR of 15.7 percent.

Individually, we project that the App Store will grow global spending by 15.8 percent CAGR through 2024, compared to a CAGR of 13.2 percent for Google Play. This will result in worldwide consumer spending on the App Store reaching $115.4 billion in four years (compared to the $67.3 billion we project for 2020), while Google Play spend is forecast to hit $55.5 billion (compared to $34.7 billion this year). This translates into 2024 App Store revenue of about 1.7 times greater than 2020, compared to 1.6 times spending on Google Play. Apple's platform will account for 67 percent of all 2024 spending across both stores, according to our projections, or 67 cents of every dollar spent.

Our forecast calls for global spending in mobile games specifically to reach an estimated $97.8 billion in 2024 on both stores combined, or about 57 percent of total gross revenue that year. This will reflect a CAGR of 9.2 percent. Combined spending in games during 2020 is projected to hit $72.6 billion worldwide, up 15.2 percent from 2019's total. While spending in games across both platforms will exhibit strong growth over the next five years, we expect spending in non-game apps on Apple's store to surpass that of games for the first time in 2024, driven by growth in subscription revenue.

App Downloads Will See a Lasting Lift

Our forecast shows the sudden uptake in mobile apps across multiple categories during COVID-19 related lockdowns having a continuing, yet diminishing, impact on adoption across the board through 2024 when we project that first-time installs will reach a total of 183.7 globally. This represents a CAGR of 9.8 percent, up from a forecasted 9 percent prior to widespread COVID-19 outbreaks.

New app installs are projected to reach 44.5 billion in 2024 on the App Store and 139.2 billion on Google Play, reflecting growth of 45 and 65 percent over 2019's totals, respectively.

The most substantial impact to Y/Y download growth will be felt this year, when installs are projected to increase nearly 22 percent over 2019 to 140.3 billion. Growth between 2020 and 2021 is expected to be about 5 percent, in comparison. Our original pre-pandemic forecast for first-time installs in 2020 stood at 133.3 billion, or 7 billion less than our revised projection.

Mobile games will account for about 41 percent or 74.8 billion of all new app installs globally in 2024, according to our forecast. This reflects growth at a CAGR of 12 percent over the next five years, but game downloads will see a more immediate lift from COVID-19's global impact over the next nine months, with 2020 installs projected to total 56.2 billion worldwide at Y/Y growth of nearly 33 percent. In comparison, global downloads of mobile games grew 10.4 percent between 2018 and 2019.

As visualized in the chart above, COVID-19's rise in China led to a sudden surge in downloads of all apps, which has subsided over time but will result in a prolonged overall lifting effect according to our models. This will ultimately result in the aforementioned increase in CAGR reflected in our revised models.

The App Economy Will Emerge Healthy

In revising our models to adjust for the observed impact of COVID-19 on the global app economy thus far, we attempted to take a pragmatic approach that presented a potential outcome based on a number of external factors, including a what could likely be a prolonged and significant economic downturn. Despite this likelihood, we expect the app world to weather these uncertain times better than other industries to which consumer isolation is a detriment rather than a potential boon.

As we're already seeing in our data, app adoption and engagement is up across the board, while consumer spending within the ecosystem is remaining strong. This period, while unpredictable for consumers in many ways, is serving to increase reliance on mobile as a means for commerce, communication, and entertainment to levels never before seen. Our forecast anticipates an outcome from this situation that sees mobile apps more centrally positioned than ever as the way consumers interact with these aspects of daily life and more. As a result, we foresee apps remaining a major economic driver and a healthy environment for developers, investors, and enterprises through 2024 and beyond.

Get the Sample Report

These insights and more are included in the free version of our 2020-2024 App Market Forecast, available at the link below. This condensed presentation of our full forecast, available exclusively to Sensor Tower enterprise market intelligence customers, covers top countries for spending in 2024, five-year category revenue projections, and download trend forecasts.

Click below to download our 2020-2024 App Market Forecast sample in PDF format: