iPhone Users in U.S. Predicted to Increase App Store Spending to $88/Year by 2020

MacRumors

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The average iPhone user's spending on paid iOS applications and in-app purchases in free-to-play apps will increase by nearly 40 percent over the next three years, according to a new forecast based on data gathered by Sensor Tower. By the year 2020, iPhone users based in the United States will spend more than an average of $88 per year on both paid "premium" apps and in-app purchases in free apps.

Sensor Tower used previous app-based spending reports to predict how much users will spend over the next three years. Most recently, in 2016 it was estimated that the average iPhone user in the U.S. spent about $47 on apps, while 2017 is on track to increase that number to about $63/year. Afterwards, in 2018 the average U.S.-based iPhone user is predicted to spend $77/year on apps, and in 2019 Sensor Tower thinks that number will finally reach $88/year. That represents a 40 percent increase from the average user spending estimated for 2017, and an 86 percent increase from 2016.

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.
While gaming apps will still dominate the spending landscape in the iOS App Store -- accounting for "nearly 70 percent" of all per-device revenue -- some other categories are forecasted to increase in popularity as well. This includes Entertainment, which Sensor Tower expects to overtake Music as the second-largest category of per-device spending in 2017, because of subscriptions in apps like Netflix and HBO NOW.

Specifically, in 2019 the Entertainment category is projected to account for about $8 of that year's $88 average user app spending, increasing from $2.80 in 2016. That still won't be anywhere near Games, with Sensor Tower anticipating the popular category to account for as much as $60 of the $88 spent by the average iPhone user in 2019.


In a separate story posted by Bloomberg this week, some of the reasoning behind the steady increase in user spending on paid games and IAPs can be connected to emerging technology being tested by game developers. A company based in Tokyo, called Silicon Studio Corp., has created a piece of software that uses deep-learning algorithms to predict how long users will play a game, what levels they might beat, and how much money they might spend and on what -- all amassed into a "psychological profile of each player" that aims to "mold player behavior."

The ultimate goal of the software is said to help developers maintain a healthy ecosystem, encouraging those who already spend a lot of money to keep doing so, while keeping non-spenders happy with the game. Besides smartphone apps, even massive multiplayer online game developers have approached Silicon Studio Corp. with interest in the software, which has been named "Yokozuna Data" after the highest rank in sumo wrestling.
Even more important, the technology lets game creators mold player behavior to keep them hooked.

"Game data is perfect for studying human behavior," said Africa Perianez, chief data scientist at Silicon Studio and a former nuclear physicist at the European nuclear research organization CERN. "It's going to change the industry, change the direction of personalized games."
Apple recently updated the App Store in iOS 11, changing the layout and user interface with new tabs and editorialized content that updates every day. For Apple, the iOS App Store and other services consistently provide the company with yearly profit gains; in 2017 the App Store set a new quarterly record in May, while services did the same in August. This past June, Apple said that developers have earned more than $70 billion since the App Store first launched in 2008.

Article Link: iPhone Users in U.S. Predicted to Increase App Store Spending to $88/Year by 2020
 

iLoveDeveloping

macrumors 6502
Sep 24, 2009
313
782
Ireland
That's weird. I haven't bought an app in months, maybe 3-4 in the last year. I think it reached saturation point for all none 'games' apps. Most people have the apps they need, weather apps twitter, news whatever. Without new hardware there are no new amazing apps coming out. It's all been done a hundred times over. I think now with AR it will kick things off again, but I think unless devs actually come up with some incredible stuff that really makes a difference and isnt just some gimmicky 'look there is a dinosaur in my living room', that's cool for all of 10mins it will just stagnate again till Apple release glasses. In saying that. What a world we live in where we are actually overly spoilt for choice - even if it is mostly the same. First world problems I guess.
 

adamjackson

macrumors 68000
Jul 9, 2008
1,644
2,391
Curious how I compare to the norm. fired up iTunes Purchase History (excluding free applications)

Paste Bot $9.99 (Mac App Store)
WunderStation $9.99 (iPad)
Movie Rental $3.99
Sequence $34.99 (Mac App Store)
Ulysses - $44.99 (Mac App Store)
GPX Navigator 2.98 (iPhone)

So in last 12 months, $13 on iOS applications, $90 on Macintosh and a movie rental. No in app purchases in last 12 months.

oh missed one, $9.98 to Garmin Smartphone Link 12 month membership so $23 on iOS applications.


Free applications:
  • Lyft
  • SWconnect
  • DoorDash
  • Weber Grills
  • Elk Travel Currency Converter
  • Keynote
  • Anova culinary
  • Nokia HealthMate
  • Defiant
  • PWS Weather Station
  • GoPro Studio
  • The Calculator
  • KOA
  • Amazon Alexa
  • Wikipedia
 

Red Oak

macrumors regular
Jun 14, 2011
204
755
That's weird. I haven't bought an app in months, maybe 3-4 in the last year. I think it reached saturation point for all none 'games' apps. Most people have the apps they need, weather apps twitter, news whatever. Without new hardware there are no new amazing apps coming out. It's all been done a hundred times over. I think now with AR it will kick things off again, but I think unless devs actually come up with some incredible stuff that really makes a difference and isnt just some gimmicky 'look there is a dinosaur in my living room', that's cool for all of 10mins it will just stagnate again till Apple release glasses. In saying that. What a world we live in where we are actually overly spoilt for choice - even if it is mostly the same. First world problems I guess.
Any one major recurring subscription (e.g. HBO, Hulu, Netflix, Spotify, YouTube TV, Pandora, Tinder/Dating, Apple Music, VPNs) would put you well over the $88/year level. This is how Apple is going to blow the doors off on App revenues
 

SeminalSage

macrumors member
Nov 10, 2016
92
213
I was thinking the same thing both of you said. If reoccurring subscriptions are counted in the mix, I'm closer to $500 a year in app store purchases. $88 would be awesome! ;)
 

ArtOfWarfare

macrumors G3
Nov 26, 2007
8,559
3,966
If Nintendo turned the iPhone into a serious gaming device, they'd be able to rake in ~$400/year from somebody like me. That's about how much I'll be spending on games for my Switch this year. Plus I spent another ~$120 on various accessories for it.

The Apple TV + AirPlay could serve as how you seamlessly throw your game onto the TV... they just need something like the joycons for easily adding joysticks and buttons to the iPhone.
 

macduke

macrumors G4
Jun 27, 2007
10,568
14,058
Central U.S.
I used to be an appoholic. I was cured by two things:
  • Apple's built-in apps became good enough for most uses
  • Freemium and pay-to-win garbage
I recently bought a few AR apps, which was mostly a novelty aside from some that allow you to measure rooms with a reasonable level of accuracy. I don't buy games any more, mostly because of what I said above, but also because I don't have as much time and when I do, I use my Nintendo Switch that I keep in my bag with my iPad Pro and mirrorless camera gear (please nobody mug me). Sometimes I'll still buy/pay to remove ads in quality apps that replace built-in apps, such as Halide camera (which I'd use more if I could replace camera shortcuts system-wide), Overcast for podcasts, and Things for to-dos.
 

asdavis10

macrumors 6502
Feb 3, 2008
444
2,263
Bermuda
They must be including recurring services revenue. After you set up your device and develop a usage pattern, are you really buying apps that often? I definitely have hundreds of dollars worth of apps on my devices but that has been since the iPhone 3G.

Services revenue is what will climb. Billed to my Apple ID monthly are Netflix ($8.99), Apple Music ($9.99), and iCloud ($9.99). So I'm well over $88/year. So I can see how people can spend that much. Just not yearly on apps.
 

Appurushido

macrumors 6502
Sep 28, 2012
251
208
$88 per year on average by 2020? I barely hit a $5 a year on average. Most expensive IAP I bough this year was Super Mario Run on sale at $5. Unless you buy a few games a year and other apps, I don't see how people spend even $50 a year on average (minus the IAP gems, energy, diamonds etc in games).
 

Jimmy James

macrumors 601
Oct 26, 2008
4,608
2,934
Magicland
Have never wasted money on in-app purchases
Sometimes the in-app fee is the same as buying an app. For example, what would otherwise be a pay-up-front app is provided free on a trial basis and continued use requires a one time payment. This is a great model that allows try before you buy.

Sometimes, it's to enable advanced features. I play a certain strategy board game. I've purchased physical expansion packs, which I've also done for the iOS version (just cheaper). I also paid to enable casting on a media app. This is all fair.

What about paid subscriptions. Netflix, music, etc? And if you don't use those I'll bet you pay a cable provider a monthly "out-of-app" purchase. It amounts to the same thing.
 

subjonas

macrumors 68020
Feb 10, 2014
2,127
1,776
Increased spending in the app store is a good thing. It will incentivize developers to bring more feature-rich apps to iOS.