The app economy has reached unprecedented heights, driven by the growth of AI-powered apps and e-tailers. According to new data from Sensor Tower, mobile app revenue reached a staggering $150 billion in 2024, with in-app purchases (IAP) growing 12.5% year-over-year.
While gaming continues to dominate IAP spend, making up more than 80% of the total, other categories are gaining traction. Outside of gaming, IAP revenue has skyrocketed over the past decade, jumping from $3.5 billion in 2014 to a whopping $69 billion in 2024.
AI-Powered Apps on the Rise
The growth of AI-powered apps is particularly noteworthy, with generative AI apps like chatbots and art generators driving significant IAP revenue. In fact, worldwide downloads of these apps hit almost 1.5 billion last year, with top performers including ChatGPT, Google Gemini, and ByteDance's Doubao.
E-Tailers and Streaming Services Make a Splash
E-tailers like Shein and Temu are also making waves, driving up the number of downloads and time spent in retail apps. In fact, Temu led the pack in downloads last year, followed closely by Shein and Meesho. Meanwhile, streaming services continue to grow, with video streaming apps like Disney+, Netflix, and Prime Video leading the charge.
Social Media and Gaming Trends
On the social media front, users spent a staggering 3 trillion hours on platforms like Instagram, TikTok, and WhatsApp in 2024, a 6% increase from the previous year. Some new key players have emerged, too, including text-based social apps like Bluesky and Threads.
In terms of gaming, mobile gaming IAP revenue increased 4% year-over-year to $80.9 billion in 2024, despite a decline in downloads. Simulation and puzzle games saw the most growth in this category, with top performers including Free Fire, Roblox, and Block Blast Adventure Master.
The Future of Mobile App Revenue
As we look to the future, it's clear that mobile app revenue will continue to grow, driven by innovations like AI-powered apps and e-tailers. While there may be headwinds in certain categories, such as video streaming, the overall trend is towards increased spending on mobile apps.
With this growth comes new opportunities for marketers and developers alike, including the chance to create engaging user experiences that drive revenue and loyalty. By staying ahead of the curve and embracing the latest trends and technologies, we can capitalize on the app economy's continued growth and success.