Get Your Slice of a $28 Billion Pie

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Recently, research firm Flurry analysed data on US app usage for the first quarter of 2014 and compared it to its yearly report for 2013. The results showed a few industry-wide shifts that we feel are very important to both Android and iOS app developers. We are going to give the raw numbers first. Then, we will analyse them from our point of view and tell you how to take advantage of the trends.

The Numbers

Currently, US mobile users are averaging two hours and 42 minutes a day on their mobile devices. This is up slightly from last year’s two hours and 38 minutes. Of that two hours and 42 minutes, apps accounted for two hours and 19 minutes or 86% of the time. The other 23 minutes a day, or 14%, was spent on the mobile web. Analysts for Flurry see this as proof that apps are king and that the Internet browser is more like another app than the be all and end all.

So, what apps were the most popular? Games were used 32% of the time, while Facebook checked in at 17%. Twitter had a share of 1.5% while other social messaging services combined for 9.5%. YouTube took 4% and other entertainment apps combined also took 4%. Utility apps accounted for 8% and productivity apps for 4%. News apps covered 3%, as did all other apps not in any of the aforementioned categories.

On the mobile web, Apple Safari had 7% and Google had 5%. All other browsers combined accounted for 2%.

While users spent only 4 more minutes a day or 2.5% more than last year on their mobile devices, time spent using apps went up 9.5% or 12 minutes per day.

The advertising money spent vs time spent statistics are an eye-opener. Google leveraged its 18% of time spent on mobile web browsers to 49% of mobile advertising revenues. This number was calculated counting time spent on YouTube and on browsers in which Google monetises display and search.

Meanwhile, Facebook had 17% of time spent and 17.5% of revenues. All other apps put together took 65% of time spent, but produced only 33% of revenues.

According to research firm Gartner’s, worldwide app revenues added up to $26 billion USD or $28.175 billion AUD. While the US isn’t always the definitive indicator of how money is being spent, statistics from there are reliable and they are the largest English-speaking market in the world. If nothing else, it is a great place to make money if you know what you are doing.

Our Analysis

We agree with many analysts that apps are king and that desktops and Internet browsers are transitioning from being a dominant force to becoming a niche. The numbers don’t lie: smartphone use is up and app usage is increasing faster than smartphone usage is. Accordingly, mobile net browsing is decreasing. This brings us to what we see is the greatest opportunity: games.

35%of smartphone time is used playing games. That is slightly over a third. Over one minute of every three spent on a smartphone app is spent playing games. However, the other major takeaway here is that games are grossly under-monetised. The numbers aren’t exact, but it can be extrapolated that games are only pulling in half of the revenue they should for the percentage of time they are being played.

How to Profit from These Trends

Strictly from the numbers, we would conclude that the best way to profit is to find a way to produce game apps. Then, you have to figure out how to monetise them better than the average game apps are monetised. Another strategy that shows promise is to figure out an app that can piggy-back onto Facebook’s popularity. The last is to solve a problem with either a utility app or a productivity app.

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