Brief:
- Global spending on in-app purchases, subscriptions and premium apps rose 12% on Christmas Day from a year earlier, per Sensor Tower Store Intelligence data. Spending grew to $196 million from $174 million the year before in Apple's App Store and Google Play; however, the figure doesn't include Android app purchases in China.
- Entertainment apps, which include Netflix and HBO Now, saw the fastest growth in spending, which nearly doubled to $9.5 million on the holiday from $4.8 million a year earlier. Spending on non-game apps jumped 66% to $38 million from $24 million a year earlier, while mobile games rose 5.2% to $158 million from $150 million, the researcher said.
- In-app spending was forecast to remain elevated during the week of Christmas as consumers who received new mobile devices as gifts tried out new applications and used gift cards for app stores.
Insight:
Overall, the data points to the enduring relevance of apps and how users are spending more money in them, even for non-gaming apps. As Sensor Tower's data show, non-gaming apps grew their share of total app spending to 20% on Christmas from 14% a year earlier. The increase likely is a result of the growing popularity of subscription apps that generate steadier revenue by automatically charging a customer each month, per Business Insider. Streaming services like Netflix and HBO Now typically depend on these regular subscription revenues more than sporadic in-app purchases.
The Amazon Alexa app, specifically, which is needed to set up Amazon's Echo devices and other products, was the top app for Android and iPhones on Christmas Day. Amazon doesn't disclose exact sales figures for its Echo devices, saying only the Echo Dot was the No. 1 selling item on the store and "tens of millions" were sold. In addition, 4 million people signed up for free trials or paid memberships to its Prime subscription service that offers free same-day, one-day or two-day shipping for most products. App store rankings reflect what people are downloading almost in real-time, which is a strong indication that Echo products were some of the most popular gifts this Christmas.
Meanwhile, the global apps market showed healthy growth that outpaced overall spending during the holidays. In the U.S., year-end holiday retail sales rose 4.9% from a year earlier, according to a report from Mastercard SpendingPulse cited by USA Today. Online retail shopping jumped 18.1% during the Nov. 1 to Dec. 24 holiday shopping season as consumers bought electronics, appliances, furniture and home furnishings.
