The expenditure on mobile applications surged to an unprecedented $171 billion in 2023, marking a remarkable 3 percent year-on-year increase, bouncing back from a slight 2 percent decline in the previous year, according to the latest data released in the State of Mobile 2024 report by data.ai.
This surge in spending on mobile applications has catapulted the mobile app economy into a staggering half-a-trillion-dollar market, showcasing a daily spending rate nearing $1.5 billion across app stores and mobile ad expenses.
The report underscores that mobile ad spending soared to $362 billion, marking an impressive 8 per cent year-on-year upsurge. This uptick in revenue generation wasn’t the sole indicator of the market’s robust performance. App downloads and user engagement also soared to record highs in 2023.
With an astronomical peak of 5.1 trillion hours spent on mobile apps, registering a robust growth of over 6 percent, the industry witnessed an unprecedented surge in user engagement. Simultaneously, app downloads remained steady at 257 billion, marking around a 1 percent growth trajectory.
An intriguing aspect highlighted in the report was the resurgence in app store spending, particularly noteworthy considering the unprecedented downturn in 2022, mainly steered by the mobile gaming sector.
While games experienced a decline in consumer spending, apps took the lead, driving a resounding 11 percent year-on-year increase to $64 billion in 2023 — over six times the total spend seen in 2016.
Remarkably, TikTok’s innovative content creator “tipping” model catapulted its lifetime spending beyond $10 billion, showcasing the app’s unparalleled success in engaging and monetizing its user base.
Another standout sector, Generative AI, experienced a sevenfold expansion in 2023, contributing to the emergence of novel sectors such as AI Chatbots and Art Generators.
The report highlighted the transformative impact of this AI growth, with embedded features permeating virtually all mobile sectors, paving the way for a new wave of digital innovation. Notable Generative AI apps mentioned include ChatGPT, Ask AI, and Character AI, showcasing the rapid evolution of AI-driven applications.
Generative AI apps also breached the $10 million monthly consumer spending mark by the end of 2023, further underlining their growing significance in the app economy.
Moreover, the report projected a significant surge in mobile ad spend to $362 billion, attributing this growth to the prevalence of short-form video and video-sharing applications.
In parallel, social and entertainment apps experienced robust double-digit growth, witnessing a 12 percent surge in time spent, totaling 3 trillion hours, while consumer spending in these categories surged by 10 percent, reaching $29 billion.
