Apple's Record-Breaking App Store Sales comes Amidst Slower App Growth

Share:
Customer Strategy
Customer Experience
It's not unusual to see people checking text messages during or after the family meal, playing games during a flight, or shopping for gifts on an app. But this behavior doesn't change the reality that mobile apps are hitting a plateau.

For many people, the holidays have become synonymous with mobile apps and devices. It's not unusual to see people checking text messages during or after the family meal, playing games during a flight, or shopping for gifts on an app. But this behavior doesn't change the reality that mobile apps are hitting a plateau. The holidays were a record-breaking season for Apple's App Store, with customers spending over $1.1 billion on apps and in-app purchases between December 20 and January 3, the company reported. Gaming, social networking and entertainment apps were among the year's most popular apps, including Facebook Messenger, Minecraft: Pocket Edition, Netflix, and Hulu. App Store customers spent over $144 million on January 1alone, making it the biggest sales day in the App Store's history.

"The App Store had a holiday season for the record books," said Philip Schiller, Apple's senior vice president of worldwide marketing, in a statement. However, these numbers belie the fact that app growth rates are slowing down. In 2015, mobile app usage grew 58 percent, as compared to 76 percent in 2014, and 103 percent in 2013, according to Flurry, an app analytics firm.

Even though app categories like personalization (e.g., emojis), news & magazines, and productivity were showing "triple-digit growth" in 2015, other categories were sluggish. Lifestyle and shopping apps, for instance, grew 81 percent in 2015, down from 174 percent growth in 2014.

It's unquestionable that mobile apps are ubiquitous and are driving the majority of media consumption on mobile devices. But the average person spends the majority of his or her time using only a handful of apps. Driving app downloads and high engagement rates are harder than ever. Brands and app developers therefore would be wise to focus on building engagement among existing users instead of chasing after new customers.

The best apps serve a purpose and offer value. For example, an app that complements an in-store experience, such as by making it easy for customers to pull up a coupon, provides a useful service and could drive more customer engagement. While bursts of success during the holiday season are great, savvy companies have a long-term strategy for better serving customer needs and expectations.

EXPERT OPINION
EXPERT OPINION