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US iPhone users spent an average of $138 on apps in 2020, will grow to $180 in 2021

U.S. consumers spent an average of $138 on iPhone apps last year, an increase of 38% year over year, largely driven by the pandemic impacts, according to new data from app store intelligence firm Sensor Tower. Throughout 2020, consumers turned to iPhone apps for work, school, entertainment, shopping and more, driving per-user spending to a new record and the greatest annual growth since 2016, when it had then popped by 42% year over year.

Sensor Tower tells TechCrunch it expects the trend of increased consumer spend to continue in 2021, when it projects consumer spend per active iPhone in the U.S. to reach an average of $180. This will again be tied, at least in part, to the lift caused by the pandemic — and, particularly, the lift in pandemic-fueled spending on mobile games.

Image Credits: Sensor Tower

Last year’s increased spending on iPhone apps in the U.S. mirrored global trends, which saw consumers spend a record $111 billion on both iOS and Android apps, per Sensor Tower, and $143 billion, per App Annie, whose analysis had also included some third-party Android app stores in China.

In terms of where U.S. iPhone consumer spending was focused in 2020, the largest category was, of course, gaming.

In the U.S., per-device spending on mobile games grew 43% year over year from $53.80 in 2019 to $76.80 in 2020. That’s more than 20 points higher than the 22% growth seen between 2018 and 2019, when in-game spending grew from $44 to $53.80.

U.S. users spent the most money on puzzle games, like Candy Crush Saga and Gardenscapes, which may have helped to take people’s minds off the pandemic and its related stresses. That category averaged $15.50 per active iPhone, followed by casino games, which averaged $13.10, and was driven by physical casinos closures. Strategy games also saw a surge in spending in 2020, growing to an average of $12.30 per iPhone user spending.

Image Credits: Sensor Tower

Another big category for in-app spending was Entertainment. With theaters and concerts shut down, consumers turned to streaming apps in larger numbers. Disney+ launched in late 2019, just months ahead of the pandemic lockdowns and HBO Max soon followed in May 2020.

Average per-device spending in this category was second-highest, at $10.20, up 26% from the $8.10 spent in 2019. For comparison, per-device spending had only grown by 1% between 2018 and 2019.

Other categories in the top five by per-device spending included Photo & Video (up 56% to $9.80), Social Networking (up 41% to $7.90) and Lifestyle (up 14% to $6.50).

These increases were tied to apps like TikTok, YouTube, and Twitch. Twitch saw 680% year-over-year revenue growth in 2020 on U.S. iPhones, specifically. TikTok, meanwhile, saw 140% growth. In the Lifestyle category, dating apps were driving growth as consumers looked to connect with others virtually during lockdowns, while bars and clubs were closed.

Overall, what made 2020 unique was not necessarily what apps people where using, but how often they were being used and how much was being spent.

App Annie had earlier pointed out that the pandemic accelerated mobile adoption by two to three years’ time. And Sensor Tower today tells us that the industry didn’t see the same sort of “seasonality” around spending in certain types of apps, and particularly games, last year — even though, pre-pandemic, there are typically slower parts of the year for spending. That was not the case in 2020, when any time was a good time to spend on apps.

 

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U.S. iPhone users spent 23% more in apps in 2017 than the year before

Games, dating apps and streaming services contributed to a rise in consumer spending in iPhone apps last year, according to new data from app store intelligence firm, Sensor Tower. The firm found that U.S. iPhone users spent 23 percent more on in-app purchases in 2017 than they did the year prior – or, an average of $58 per active user was spent on in-app purchases, up from $47 in 2016.

To be clear, this is only on purchases made within an app using Apple’s in-app purchase or subscription mechanisms. It’s not tracking e-commerce purchases – like things users bought in Amazon – or payments made to service providers in an app like Uber or Lyft.

Games were the largest category of consumers spending in 2017, accounting for roughly $36 of the $58 spent per device; or 62 percent of the spending. That’s a 13 percent increase over 2016’s $32 spent.

It’s no surprise that the biggest driver of iPhone spending is games.

The category typically outweighs all others in terms of revenue, not only for paid downloads, but for the ongoing purchases of things like virtual goods, unlocking levels, in-app currency, and the other extra features that mobile games offer. And because people play some types of games for long periods of time – like MMORPGs – they have many opportunities to spend on in-game items.

So while it’s notable that in-app spending in games is up by a few dollars, year-over-year, the more interesting trend is the rise in in-app spending generated by Lifestyle apps and subscription-based streaming services.

Specifically, outside of games, Entertainment apps – which includes streaming services like Netflix, Hulu, HBO NOW, etc. – grew 57 percent year-over-year to reach $4.40 in consumer spending per device. That makes it the largest category of spending outside games.

Music is also another big category for spending, up 8 percent year-over-year to $4.10. Much of what people are paying for in a music app is a subscription for the premium tier of the service, as with Pandora or Spotify. If this category was combined with Entertainment – which is also growing thanks to subscriptions – you’d see that streaming services are now a big factor contributing to the overall rise in U.S. consumer spending in iPhone apps.

But subscriptions to other types of services are growing, too.

Lifestyle apps, led by dating apps like Tinder and Bumble, grew 110 percent from 2016 to 2017 to reach $2.10 in iPhone consumer spending per device.

Spending in social media apps was up by 38 percent, to $3.60 thanks to things like in-app tipping (e.g. Live.me, Periscope, YouTube Gaming), subscriptions (e.g. LinkedIn memberships), and other activity (e.g. call credits in Skype).

Twitch has oddly categorized itself as a “Photo & Video” app, in case you’re wondering where it fits in.

While Sensor Tower’s published report focused on iPhone consumer spending, the company tells TechCrunch that Android spending on Google Play was much lower last year.

“We estimate that for each active Android device in the U.S. last year, approximately $38 was spent on Google Play – on and in apps – so about $20 less than iOS,” said Sensor Tower’s head of mobile insights, Randy Nelson. “That tracks with the disparity in revenue generation we see between the stores outside the per-device level,” he added. “Android users generally spend less on or in apps, Google Play generated about 60 percent of the App Store’s revenue last year in the U.S.”

However, he pointed that Android users have more than one official store to buy from – like the Amazon Appstore or Samsung Store, for example. Some apps also choose not to monetize directly through Google Play, which is an option not permitted on Apple’s App Store.

The increase in consumer spending isn’t the only significant trend Sensor Tower spotted.

iPhone app installs in the U.S. were up nearly 10 percent from 2016 to 2017, with users installing an average of 4 more apps in 2017 compared with the prior year.

Games, again, were a big source for installs, followed by Photo & Video apps, Entertainment apps, Social Networking and Utilities.

In total, users had installed an average of 45 apps on their iPhone apps in 2017, the firm found.

Correction, 4/13/17, 1 PM ET: users have installed 45 apps over the past year; that’s not the number of installed app; the post has been updated with clarified wording. Apologies for the confusion. 

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