App Annie Index – Market Q1 2014: Revenue Soars in the United States and China

AA-Index-banner_FINAL_1384x742_[Market]The worldwide app market continues to grow as Google Play revenue climbs in the United States, and China leads iOS growth.

 

Welcome to the App Annie Market Index, the barometer of the macro trends that are emerging in the app ecosystem across stores, countries and categories. We bring you the most complete analysis of the global app market available, using worldwide data that represents over 150 countries on both the iOS App Store and Google Play. This report highlights the trends that are shaping mobile content distribution at the highest level and how it will impact your app business. 

 


The information contained in this report was compiled using App Annie Intelligence, the industry-leading market data solution for identifying opportunities in the app store economy. It provides the most accurate market estimates for global app downloads and revenues – to learn more, take the tour or request a demo today.


 

Key Trends Across Stores, Countries and Categories

  • Google Play worldwide downloads now exceed iOS App Store downloads by around 45%, driven by growth in emerging markets. Russia and Brazil have been on the rise for some time now, but Mexico and Turkey also had a strong influence on Google Play downloads in Q1 2014.
  • The iOS App Store remains comfortably ahead in worldwide revenue, generating about 85% more revenue than Google Play. This gap narrowed over the last quarter though, as Google Play revenue increased markedly in the United States and United Kingdom.
  • China was the key market for iOS App Store growth, showing exceptional gains in both downloads and revenue. iOS App Store revenue in China grew around 70% quarter-over-quarter.
  • Games remained the key category driving growth in both app stores. However, there was also growth in categories outside of Games. Tools saw gains in Google Play revenue, dominated by anti-virus and security apps. On iOS, Finance grew in revenue during tax season in the United States.
  • Messaging apps remained a huge growth area, contributing to the gains for the Communication category on Google Play and Social Networking on iOS.

 

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Google Play Builds a Substantial Lead in App Downloads

 

iOS App Store vs. Google Play App Downloads & Revenue

image01 - Store Download Revenue Charts

 

Google Play led the iOS App Store in downloads by approximately 45% in Q1 2014, up from 35% in the previous quarter. Meanwhile, the iOS App Store maintained its comfortable advantage in revenue, leading Google Play by 85%. However, Google Play continued to narrow this revenue gap. The gains for Google Play come as Android devices extended their lead in worldwide device installed base.

Growth in Google Play downloads was driven by explosive growth in emerging markets, with Mexico and Turkey showing themselves as markets to watch. According to IDC, smartphone adoption has grown rapidly in Mexico, increasing around 75% in 2013 and expected to grow by approximately 40% in 2014. Over 65% of these devices used the Android OS, and this proportion is expected to increase in 2014. In Turkey, significant investment in IT and prominent technology projects as part of Vision 2023 and the FATIH education project are contributing to rapid device growth. According to IDC, IT spending is expected to increase around 9% in Turkey this year, driven primarily by the adoption of smartphones and tablets.

iOS App Store revenue growth was driven largely by China and the United States. However, impressive growth extended to smaller markets such as Vietnam and South Africa. Games remained the key category for revenue growth, but Finance apps also gained markedly, with worldwide category revenue growing around 45% quarter-over-quarter. This was boosted by the performance of TurboTax 2013 during tax season in the United States.

Games also topped growth in Google Play revenue, but other categories also saw notable revenue growth. In particular, Communication saw huge gains, and News & Magazines made a significant contribution. While emerging markets drove Google Play download growth, it was established markets such as the United States and United Kingdom that contributed the most to narrowing the revenue gap with the iOS App Store.

 


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China Drives Growth in the iOS App Store

Top Countries by Downloads iOS Q1 2014
Country Rank Change
vs. Q4 2013
1 United States -
2 China -
3 Japan -
4 United Kingdom -
5 Russia -
SOURCE: App Annie Index™

 

Top Countries by Revenue iOS Q1 2014
Country Rank Change
vs. Q4 2013
1 United States -
2 Japan -
3 China -
4 United Kingdom -
5 Australia -
SOURCE: App Annie Index™

 

According to App Annie Intelligence estimates, the ranking of the top five countries in the iOS App Store by both downloads and revenue remained remarkably stable in Q1 2014. However, there was still significant growth for the top countries with China making strong gains, as it has done for several quarters.

With a substantial rise in both downloads and revenue, China is now a dominant force in the worldwide growth of the iOS App Store. In January, Apple completed a deal to bring the iPhone to China Mobile, the country’s largest carrier with over 700 million subscribers. This deal reportedly drew one million new iPhone users in China in February alone. Rising demand for iPhones in China in Q4 2013 indicates that further gains may also be made for Apple outside of the China Mobile deal. During Q1 2014, downloads in China saw strong growth from apps within the Games, Travel, and Social Networking categories. Revenue growth in China was even stronger than download growth, rising by around 70% quarter-over-quarter. It was again Games that accounted for the majority of growth, with Social Networking apps also making a significant contribution.

United States Drives Google Play’s Revenue Growth 

Top Countries by Downloads Google Play Q1 2014
Country Rank Change
vs. Q4 2013
1 United States -
2 Brazil 1
3 Russia 2
4 South Korea 2
5 India 1
SOURCE: App Annie Index™

 

Top Countries by Revenue Google Play Q1 2014
Country Rank Change
vs. Q4 2013
1 Japan -
2 United States 1
3 South Korea 1
4 Germany -
5 United Kingdom -
SOURCE: App Annie Index™

 

The Q3 2013 Market Index noted the dominance of Asia-Pacific countries in Google Play revenue, which continued in Q4 2013. However, in Q1 2014, App Annie Intelligence data revealed a significant shift in the market. The United States saw phenomenal growth in Google Play revenue of approximately 55% quarter-over-quarter, significantly outpacing other countries. This took the United States past South Korea, home to major players in the Android ecosystem such as Samsung and LG. South Korea previously held second place for Google Play revenue in the Market Index since Q1 2013. Revenue growth in the United States was led by the Arcade & Action and Casual Games subcategories. In particular, Clash of Clans saw phenomenal growth on Google Play, coinciding with a series of TV commercials that included a slot in the Super Bowl coverage.

The United Kingdom also saw substantial growth in Q1 2014, gaining around 35% quarter-over-quarter. This was the second consecutive quarter of explosive growth for the United Kingdom, following gains of almost 55% from Q3 to Q4 2013.

In Google Play downloads, Brazil and Russia both experienced very strong growth in Q1 2014. Along with China’s iOS growth, BRIC countries generally enhanced their position as emerging app store superpowers. The gains made in Q1 2014 pushed Brazil and Russia into the top three countries by Google Play downloads, surpassing South Korea. While Games dominated growth in both Brazil and Russia, downloads in Russia were boosted by a meteoric rise in the Sports category in February, coinciding with the Sochi 2014 Olympics.

 


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Apps Outside of Games Help Google Play Narrow the Revenue Gap

Top Categories by Downloads iOS Q1 2014
Category Rank Change
vs. Q4 2013
1 Games -
2 Entertainment -
3 Photo & Video -
4 Social Networking 1
5 Lifestyle 1
SOURCE: App Annie Index™

 

Top Categories by Revenue iOS Q1 2014
Category Rank Change
vs. Q4 2013
1 Games -
2 Social Networking -
3 Music -
4 Education -
5 Entertainment -
SOURCE: App Annie Index™

 

Top Categories by Downloads Google Play Q1 2014
Category Rank Change
vs. Q4 2013
1 Games -
2 Communication -
3 Tools -
4 Entertainment -
5 Social -
SOURCE: App Annie Index™

 

Top Categories by Revenue Google Play Q1 2014
Category Rank Change
vs. Q4 2013
1 Games -
2 Communication -
3 Social -
4 Tools 1
5 Travel & Local 1
SOURCE: App Annie Index™

 

Overall, there was considerable stability in the rankings of the top categories worldwide in both stores in Q1 2014. Games continued to dominate downloads and revenue, accounting for around 75% of revenue on the iOS App Store and approaching 90% of revenue on Google Play. App Annie Intelligence shows that Games led growth in both downloads and revenue on both app stores, with China the leading contributor on iOS and the United States driving Games growth on Google Play. However, growth also occurred outside of Games on Google Play, helping narrow the revenue gap with iOS.

 

image10 - iPhone Top MatrixGames continued to dominate the grossing ranks on the iOS App Store. View this interactive Store Stats chart and many others free here.

 

Messaging apps made substantial waves throughout Q1 2014 with headline news such as Facebook’s acquisition of WhatsApp, Rakuten’s acquisition of Viber Media, and Alibaba Group’s investment in Tango. The growing importance of these apps was reflected in both downloads and revenue for the related categories – Social Networking on iOS and Communication on Google Play.

On Google Play, Communication downloads expanded dramatically in Mexico thanks to WhatsApp Messenger, Facebook Messenger, and Telegram. Communication revenue also saw a big rise, particularly from Taiwan and Germany. LINE performed strongly in Taiwan, and WhatsApp Messenger and Threema made major strides in Germany. Swiss-owned Threema places a strong emphasis on security, using end-to-end data encryption for all messages. Revenue from paid downloads of Threema grew notably in the wake of Facebook’s WhatsApp acquisition, indicating gains may be related to the tighter data protection laws and possible privacy concerns in Germany.

On iOS, Social Networking moved up the download ranks, boosted by strong growth in China and Russia. The effects of messaging apps even extended to Games on iOS, with much of the revenue growth in Games coming from WeChat’s gaming platform in China. On the last day of the quarter, four of the top five grossing games for iPhone in China were published by Tencent for the WeChat platform.

The Tools category was also key to helping Google Play narrow the revenue gap. Worldwide, four of the top five apps in the Tools category by Google Play revenue focused on anti-virus and security functions. A recent report classified 42% of Android apps as “malicious, unwanted, or suspicious”, and noted an escalating threat to Android phones. An increasing awareness of these threats may have spurred the increase in revenue for anti-virus apps on Google Play.

 

image11 - GP Top MatrixSecurity apps such as Norton Security Antivirus and Lookout Security & Antivirus featured prominently in Google Play grossing ranks. Access this interactive chart on App Annie’s free Store Stats.

 

To get access to the market data solution behind these insights, take a tour of App Annie Intelligence. It provides the most accurate market estimates available for the downloads and revenues of apps globally. To get an update on the top apps on the iOS App Store and Google Play for February 2014, please be sure to check out App Annie’s latest Games Index and Apps Index.

 

Notes:

  • App store metrics reported in this article are based on data from App Annie Intelligence. Market-level metrics represent the full worldwide geography for both iOS and Google Play.
  • App Annie Intelligence is currently available for the iOS App Store and Google Play. It does not currently provide estimates for other app stores, such as the Amazon Appstore. While in many countries, iOS and Google Play represent a significant portion of the app market, that is not the case for some countries. For example, China has a number of sizable third-party Android app stores.
  • App Annie Intelligence revenue estimates reflect app store revenue earned from paid downloads and in-app purchases. They do not include revenue earned from in-app advertising.
  • App Annie Intelligence revenue estimates represent the net revenue that the publishers earned from the app store; they exclude the fees taken out by Apple and Google. Currently, iOS App Store and Google Play each take a 30% cut.
  • In the iOS App Store, a publisher categorizes their app under a Primary Category as well as an optional Secondary Category. All category analysis in the App Annie Index has been conducted based on the app’s Primary Category only. This approach prevents any overlap or duplication among categories, and therefore allows us to size the categories and analyze category share changes properly.
  • On Google Play, an app can be categorized under only one category, so there is no overlap across categories.
  • In both the iOS App Store and Google Play, a publisher may decide to shift its own existing app from one Primary Category to another Primary Category. In such cases, downloads and revenue for the app in the month in which it is changed are attributed to app’s Primary Category at the end of the month.
  • Any non-App Annie trademarks or images used in this report are the property of their respective owners.  App Annie claims no rights in those trademarks.

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  • fastow2012

    I wonder what will be the effect of a 5″5 screen iphone on those stats? I just hope $aapl won’t be too bolstered by today’s result and end up delaying the iphablet…

  • Boullevard Creatives LLC

    Great info thanks!

  • http://achivd.com Alexander Korchagin

    I’ve noticed that Chinese iOS appstore revenue was mainly boosted by vertical scrolling shooters genre. What would you think to be the main reason: WeChat integration, local genre preferences, or might that be a birth of a new global trend?

    • http://www.qikuyx.com Qi Wang

      Of course it was boosted by WeChat, which have more than 200m players in China. Besides, the game have deep RPG growth data system. It will attract a lot whale players.

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