App downloads and revenue hit record levels in the third quarter of 2017, according to a new report out this morning from App Annie. Downloads across the two major app stores, Apple’s App Store and Google Play, reached nearly 26 billion worldwide – up 8 percent over the same time last year. That figure doesn’t include reinstalls or app updates, only new downloads. In other words, it paints a picture of the app economy’s true growth, rather than including downloads from people who were just grabbing a new version of an existing app, or re-downloading an app they had previously installed.
In addition, app revenue reached a record of nearly $17 billion, App Annie said.
Much of the download growth is coming from emerging markets where smartphone penetration is still relatively low. That means we’ll likely see continued increases in worldwide downloads for some time.
In particular, App Annie found that the download growth on Google Play was heavily fueled by emerging markets, with the biggest contributor being India. In that country, downloads nearly doubled from Q3 2016 to Q3 2017.
Other Southeast Asian nations, and particularly Vietnam and Indonesia, contributed to Google Play growth, too. Both countries saw double-digit growth rates year-over-year, with Indonesia in 4th place, and Vietnam moving into 7th.
Overall, Google Play led iOS in worldwide downloads, having grown downloads by 10 percent since last year.
Meanwhile, iOS download growth was up 8 percent from last quarter – its highest quarter over quarter growth rate since Q1 2016. This is largely attributable to China, which saw the highest quarter over quarter market share growth, followed by the U.S. and Saudi Arabia.
Alongside the increase in downloads, consumer spend is also still growing. In the third quarter, revenue from iOS apps and those on Google Play combined reached nearly $17 billion, up 28 percent over the year prior.
In this case, it’s iOS that’s leading the app revenue growth. In Q3 2017, consumer spend on iOS was almost double that of Google Play. But both stores reached record levels of consumer spend, thanks to year over year growth rates over 25 percent.
China, again, is a major factor. It was the largest market overall for consumer spend and saw the highest year over year growth in absolute spend. South Korea – now at its highest ranking ever as 4th overall in consumer spend – saw the second highest market share growth.
App Annie attributed a lot of South Korea’s performance across iOS and Android to NCSOFT’s game, Lineage M, which became the highest grossing app on both platforms in the quarter.
Entertainment apps, and particularly video streaming apps, also had a strong showing in Q3, with worldwide consumer spend in the category up by 30 percent quarter over quarter on iOS, and up 45 percent on Google Play.
On iOS. Tencent Video grew the most, followed by Youku and Starz. And on Google Play, HBO NOW had the highest share change, followed by Netflix and Starz.
Apps are also continuing to capture more of consumers’ time and attention, with the total time spent using apps grew 40 percent year over year to reach almost 325 billion hours in the quarter, App Annie found. (This figure comes from measurements on Android phones only and excludes China, meaning it’s not fully representative. But it does give you an idea of the growth trend.)
App Annie’s current forecast estimates that worldwide downloads will reach nearly 240 billion and consumer spend will top $100 billion by 2021.