Mobile has returned to growth – user spending in the 1st half of 2023 set a new record

Consumer spending on mobile devices after declining in 2022 rose by 5.3% year on year. The number of downloads also increased by 3.2%. Growth in consumer spending has picked up after an uncharacteristic slowdown in 2022 as consumers battled inflation.

The mobile app ecosystem is healthier than ever

Here’s everything you need to know about the state of the market in 2023.

The return to positive growth in the first half is an encouraging sign that the decline in consumer spending in 2022 could be a temporary fluctuation in the long-term robust growth of the mobile app market. According to data.ai’s latest research, the global app market has rebounded after being hit by the 2022 macroeconomic crisis. The first half of 2023 marks a resumption of strong growth, with consumer spending in the first half of 2023 reaching a record $67.5 billion and 76.8 billion app downloads worldwide on the iOS and Google Play platforms.

In 2020, consumer spending on apps has grown steadily and sometimes rapidly since app monetization began over a decade ago. However, in 2022, the app market gave us our first reason to doubt continued growth as global consumer spending fell for the first time . Is this just a short-term correction after the explosive growth seen at the start of the COVID-19 pandemic, or is it a sign that the mobile app market has peaked?

The results of the first half of 2023 clearly point to the first – the positive dynamics of consumer spending, which resumed at the end of 2022, continued throughout the first half of 2023. Total consumer spending in the first half of the year rose 5.3% year-on-year, including 16% growth in apps, while game spending remained roughly the same year-on-year.

While spending on mobile games appears to be stagnant at first glance, recent trends suggest that growth in this largest category of all is likely just around the corner. Positive year-on-year growth returned in both March and May 2023 after hitting its low of -13% in May 2022. In fact, growth rates in the first half of 2023 are not too different from early 2020. After the tumultuous events of the past few years, new signs of normal growth are expected to emerge.

iOS and Android in the first half of 2023

Consumer spending on iOS rose 5.8% year-over-year and Google Play grew 4.3%. In the first half of 2023, iOS generated $43.5 billion in revenue.

iOS users are still spending far more than their Google Play counterparts. iOS accounts for almost 65% of all app store spending, with the figure even higher in pure non-gaming apps, where iOS accounts for 71% of all spending. TikTok continues to be the unicorn in non-gaming consumer spending, up 31% year-over-year, while other subscription-based apps like Disney+, YouTube, and Duolingo are also posting strong growth of 33%, 39 % and 48% respectively.

Which categories saw the most growth?

In terms of categories, the largest categories by consumer spending (on iOS and Google Play) were Games, Entertainment, and Social. Among the categories with at least $500,000 spent in H1 2023, Productivity (32%), Business (27%), and News & Magazines saw the largest year-over-year growth (25%).

Long-term trends show how quickly consumer spending outside of mobile games is growing, more than doubling since the first half of 2019. Games have seen more modest growth in recent years, at 25% over the same period.

Regionally, the US, China, and Japan accounted for the most consumer spending on iOS, while the US, Japan, and South Korea led the way in Google Play.

App downloads hit a new all-time high

In contrast to the more volatile consumer spending trends seen in recent years, app downloads have continued to grow steadily. Overall, users downloaded 76.8 billion apps in the first half of 2023, roughly the same as in the second half of 2022 and up 3.2% year-over-year.

While Google Play still accounts for more than three times as many app downloads as iOS, growth on iOS has been faster, with installs up 10% year-over-year to over 18 billion. Google Play installs grew by 1.4% year-over-year to 58.7 billion.

In the first half of the year, India, Brazil, and Indonesia were the largest markets by Google Play downloads, while Turkey, Russia, and Indonesia saw the biggest upward movement compared to the second half of 2022 on the platform. While on iOS, China, the US, and Japan were the top markets in terms of downloads, with Brazil, China, and the US posting the biggest growth compared to H2 2022.

In terms of categories, Games, Tools, and Social have the most downloads. At the same time, the highest growth in the absolute number of downloads on a six-month basis was observed in the categories “Games”, “Performance” and “Tools”. Percentage-wise, categories such as Productivity, Books & Reference, and Health & Fitness lead the way. Their growth compared to the previous half-year amounted to 16%, 7% and 5%, respectively.

Looking at growth by category since the first half of 2019, we can see that the impact of COVID-19 continues to normalize, but does not completely disappear. For example, downloads of the Travel & Navigation apps grew by 13% compared to the first half of 2019, although this growth still outpaced the 21% growth in apps as a whole (excluding games).