2026 State of Mobile: AI Moves Mobile into Its Next Phase

Mobile reached record highs across every key metric in 2025, fueled by Generative AI and expanding monetization opportunities. Sensor Tower’s State of Mobile 2026 report shows that downloads, in-app purchase (IAP) revenue, and time spent each hit all-time highs. Global IAP revenue in particular surged 10.6% year over year (YoY) to reach $167 billion, underscoring how decisively the market has shifted toward monetization.

In the report, we highlight how app developers are taking advantage of the latest opportunities and managing headwinds, from incorporating new Generative AI features to adjusting to economic conditions or market regulations.

The Attention Economy Takes Center Stage

As we enter year 18 since the launch of mobile app stores, the mobile market is mature but far from stagnant, with growth shifting from adoption and engagement towards monetization as leading apps deploy increasingly diverse revenue strategies. Despite this, opportunities to grow reach and engagement remain. Total downloads across iOS and Google Play edged up 0.8% YoY to nearly 150 billion, surpassing the previous high from 2023. Meanwhile, people continue to spend more time on their phones than ever before. Consumers spent 5.3 trillion hours across iOS and Google Play apps (+3.8% YoY), or roughly 3.6 hours per day per mobile user.

As downloads and time spent growth has slowed in many of the more established markets, revenue has continued to rise, intensifying the battle for user attention across categories. Revenue from in-app purchases and paid apps and games reached $167 billion in 2025 across iOS and Google Play – a staggering 10.6% YoY increase. Non-game categories drove this growth, with IAP revenue from non-gaming apps surpassed games for the first time. Non-game IAP revenue climbed 21% YoY and reached nearly three times the amount spent just five years earlier. Games saw more modest growth at 1.3% YoY.

Mobile is Global — But Knowing Your Market is Key

Mobile is increasingly interconnected, yet country-specific forces – like local competition, tariffs, and regulations – make deep market knowledge critical. The United States remained the largest mobile market by revenue, with consumers spending nearly $60 billion in 2025. Western European markets also contributed to the rapid growth, led by the United Kingdom, Germany, and France.

At the same time, engagement trends continued to diverge by region. Time spent in the US rose a modest 4% YoY, rebounding slightly after signs of digital fatigue emerged in 2024. With monetization opportunities expanding and AI enhancing user experiences, competition for attention is set to remain intense into 2026.

Gaming Continues Shift From Scale To Efficiency

Gaming posted a third consecutive year of revenue growth in 2025, with IAP revenue approaching $82 billion (+1.3% YoY). The market has largely recovered from the post-pandemic correction that followed the 2021 peak. Time spent also rose slightly even as downloads fell, pointing to a market shifting from new-user volume to lifetime value expansion.

Engagement diverged by market: time spent rebounded in the US and Japan after 2024 declines, while China Mainland fell. Within Europe, the UK strengthened while France was flat and Germany softened. With installs down, growth depends less on adding users and more on expanding lifetime value from the existing base. Teams should prioritize retention and reactivation, tighter payer management, and user acquisition disciplined by payback and conversion, not volume.

Big Tech and Image Generation Accelerate AI’s Ascent in 2025

The rapid rise of Generative AI apps showed no signs of slowing in 2025. On the contrary, both downloads and IAP revenue growth accelerated, surpassing the already high benchmarks set in 2024. Downloads doubled YoY to reach 3.8 billion, while IAP revenue nearly tripled to exceed $5 billion. This momentum reflects a new phase in the AI race. Big tech companies such as Google, Microsoft, and X are investing heavily in their AI Assistants, expanding use cases and rolling out new features in an effort to challenge the market leader, ChatGPT.

Turning to engagement reveals that mobile users are no longer just testing new AI offerings—they are integrating them into their daily lives. Time spent in Generative AI apps reached 48 billion hours in 2025, roughly 3.6x the total in 2024 and nearly 10x the level seen in 2023.

Session volume followed a similar trajectory, surpassing one trillion in 2025. The fact that session growth is accelerating faster than downloads suggests Generative AI apps are shifting their focus from acquiring new users to deepening engagement among existing ones.

Additional Highlights:

Read the industry's leading mobile report covering everything you need to know to succeed on mobile in 2026 and beyond, spanning 10 industries and more than 20 markets in a dynamic, interactive format covering:

• Finance App Trends Reveal a Changing Mobile Climate: Credit and Lending apps saw downloads climb 18% YoY, offsetting a substantive decline in Investing and Cryptocurrency apps. 

• Sports Betting Apps Capture Attention: In the US, user acquisition for sports betting apps remained stable in 2025, while time spent increased by 7% YoY. Globally, downloads for sports betting apps increased 24% YoY as it launched in new markets like Brazil, while fantasy sports apps fueled growth in India.

• Tariffs and AI Reshape Mobile Retail: Global retail app downloads and time spent declined as expansion from Temu and SHEIN slowed, while retailers tested AI-powered shopping assistants.

• Gaming Continues Shift From Scale To Efficiency: With UA costs elevated, winners sustained growth by improving unit economics via deeper monetization and live ops discipline, supported by high-attention ad formats.

• Food Delivery Apps Surge Past Pandemic Peak: Restaurant and Food Delivery apps saw 14% growth YoY, with Uber Eats capturing advertising investment from 15 of the top 20 Quick Service Restaurant (QSR) brands to increase their reach.

Sensor Tower’s 2026 State of Mobile Report dives deep into regional and category-level market trends made possible by our award-winning digital market insights platform. Claim your copy of the State of Mobile 2026 today!