Mobile App Payments Fishing For Whales And Minnows

The 20,000 Foot View

           of mobile app revenue is concentrated in            of app buyers with the majority of that revenue driven by in-app purchases. These ‘whales’ are the beating heart of the mobile app economy but their small number means that they make precarious foundations for the market. In a similar manner to the music industry, a large part of total revenue is driven by a small number of super-fans, while the vast majority of mainstream consumers remain free users. As a result any behavioral change among the small body of buyers has the power to shape the entire global app economy. 

Key Findings

• Only            of            pay to download apps or            in-app payments
• Downloads and            Purchases (IAP) account for            of            app revenue
• Smartphone penetration            app payment penetration do not            correlate 
• Smartphone penetration            an even gender distribution, but            app payers are male
• Although the            of app revenue comes from            buyers, the pool of app            is approximately            larger
• King has            active monthly users, only            million            whom account for its entire            representing a            free-to-paid conversion ratio
           of app users spend            or more per month, accounting for            of revenue from app spenders            of app users spend below            per month, accounting for            of revenue from app spenders
• IAP bundling            a potential route to mainstream            but over bundling could lead            app economy devaluation

Companies mentioned in this report: Apple, Google, KING