In the past 18 months, Android has emerged as a major gaming platform. Yesterday at GDC in San Francisco, we unveiled that over 70% of all Android devices engage in at least one gaming app per month. On the Flurry platform alone we see over 525 million worldwide Android devices actively engaged in mobile gaming each month. But the perception is that iOS is the more mature ecosystem and that Android is still sorting itself out, especially around business models. As we have done with the iOS platform, today we unveil the retention matrix for Android, which we hope is a helpful reference and guide for developers.
IAP vs. Ads: It's all in the Game Mechanics
Let’s take a look at the retention matrix for 1,382 of the top gaming apps for Android. On the X-axis is 30-day Static Retention, as defined as the percentage of new users who opened the app 30 days after install (this is not to be confused with Flurry’s Rolling Retention, which looks at the percentage of new users who open the app 30 days or later after the install). On the Y-axis is the average sessions per week for that genre. The genres plotted on the chart have been manually curated by Flurry and reflect the game mechanic of the apps.
Quadrant I houses those evergreen genres that are most likely to keep their users highly engaged for long periods of time, and are typically dominated by advertising. These easy-to-play, repeatable games have strong staying power, as evidenced by their high retention. According to Flurry data, good ol’ Solitaire is the game that never gets old, with the highest retention of any genre at 50%. Not surprisingly, Social Turn-Based games have the highest session frequency and high retention given their social nature. Successful apps in this genre have built in appointment mechanics, requirements that a player return to the game in a certain time period to gain a reward, which are critical to get those high frequency and return metrics. Genres in Quadrant I are particularly amenable to ads as they have the potential to generate a very high impression count over time given their high frequency and retention rates. It’s not uncommon to see advertising generate 90% of these games’ revenue.
At these retention levels, re-engagement marketing becomes compelling, as there is opportunity to recapture users who are likely to stick around for another long spell. Since we know the peak usage for the average game only lasts two months, re-engagement is very important for these titles. Evergreen genres are also great games to use as a platform for promoting your other, higher ARPU (average revenue per user) titles.
Games in quadrant II have high frequency but lower retention rates. In other words, they’re used often but for limited time periods. This implies that those users who do stick around will be highly engaged. To maximize revenue in genres like management/simulation, slots, and strategy, tip the balance towards IAPs, as these players are willing to pay good money for content and capabilities. But don’t ignore the significant percentage of players who won’t pay. Use rewarded video ads to get the non-payers to engage more with the game by letting them earn the currency they value.
In these genres, take advantage of this intense play with offers and new content early and often (and at times of key emotional investment). Content releases need to be complete, submitted, and ready near initial push of the game, as players won’t stick around for improvements.
Genres in Quadrant III have relatively low retention and frequency. These genres have the pickiest audiences, but those that stay…pay. Like Quadrant II, focus on IAP and use video ad opportunities to monetize those users who don’t pay but want to continue playing. Well-spaced interstitials that are not too disruptive are another good choice for these genres. Developers should look to maximize revenue early in the lifecycle of game.
For these low-retention genres, it can be difficult to find right kind of user. What are known to be the highest ARPDAU (average revenue per daily active user) categories (Card-Battle and Strategy) have low “loyalty” – this is in part due to heavy marketing despite only a niche audience being interested in the genre. It’s worth the broad marketing for some of these games because when they do find a good user it is highly valuable. That said, targeting by age, gender, and persona can improve efficiency.
Quadrant IV, like Quadrant I, houses genres with extremely high retention, but relatively lower frequency. Match 3/Bubble shooter and Endless Runner genres are on the border here. We say “relatively” lower frequency as these games are still played at least once a day on average. Monetization strategy tips slightly more towards advertising given the high number of impressions generated over time. Of course, if you’ve got a hit like Candy Crush, the game can monetize quite nicely through IAP.
Targeting the Right Players
The first step in monetizing any app is acquiring new users. To understand whom to target, we next looked at the age and gender distribution of our game genres. On the X-axis is the average percentage of MAU that is female and the Y-axis is average age of MAU in the genre.
Not surprisingly, Android skews male and younger. Most Android genres appeal to males under 35, suggesting there’s an opportunity for an Android game that appeals to older males. Solitaire and Slots are the only genres that have a firm middle-aged audience, with Solitaire skewing more female.
Games that monetize through IAP, such as Card/Battle, Strategy, and Action/RPG titles, are more appealing to men. Genres more appealing to women- Solitaire, Brain/Quiz- are those that are more amenable to monetizing through advertising. Of course, there are always exceptions and hit titles generally figure out how to make both men and women pay.
Winning on the World's Largest Gaming Platform
There’s a player for every Android game. And for every game there’s the perfect mix of IAP and advertising to make it a successful business. If the game has the potential to generate high levels of impressions- either through high frequency, retention, or both- consider some form of advertising. If the game appeals to the few, the proud, the payers- focus on IAPs. Whatever the monetization strategy, target your acquisition efforts to find the right player.
In August of 2013 Google suffered a rare two minute outage. During that infamous two minutes 40% of the web went dark. Forty percent! This event was a clear reminder of the ultimate control Google has over the web and web traffic.
Since the early days of the web, control of discovery and web traffic has been the focus of many. In the mid- to late-nineties, such control was in the hands of ISPs such as AOL and Earthlink. In the late nineties, the control shifted to portals with Yahoo and its MyYahoo service in the lead position. (I recall a conversation in 2000 with a former colleague of mine asking for an introduction to the MyYahoo team: “If you are not on MyYahoo, you simply don’t exist. It costs too much to promote your site.”) In the early to mid 2000s, Google dis-intermediated Yahoo and stole that position with Search and AdWords. Google has since reigned supreme over web discovery, organic and paid traffic acquisition. An entire industry has been built around SEO and SEM and both of these acronyms have become synonymous with the name Google.
Then came mobile and its apps. In just over five years since the launch of the Apple AppStore, apps have taken the mobile industry by storm. Today, 86% of time spent on mobile devices is spent inside applications, with just 14% left for the mobile web. App discovery has been a major challenge over the past five years. That led to the fast rise of the paid App Install market. In fact, Marketers are expected to spend over $2.4 billion USD in the US alone to get their apps noticed.
Climbing into a Walled Garden
Discovering relevant content and services within apps has also been a big challenge. Consumers want such a service. As an example, if a consumer is searching for a flight to Las Vegas, in an ideal scenario the phone or discovery service would launch whatever flight booking app is installed on the phone and send the consumer directly to the reservations page. But apps (alongside the content and services in them) can’t be crawled. They are not just about index and links, and hence are hard to “page rank.” As a result it is difficult for a search engine to discover apps and offer consumers an entry point.
Consumer behavior on mobile is very different than the desktop web. The de-facto behavior on the web is to launch the browser to google.com, type a sentence and be re-directed to content. The de-facto behavior in mobile is to launch an app (previously installed on the device) and enjoy the comprehensive experience offered within it. You are rarely, if ever, linked out to a mobile webpage from an app or sent to another app. Each experience is essentially an island unto itself, completely reliant on the consumer to come ashore.
The industry and some major mobile players are looking to solve this problem and the battle is raging for the “gateway” for mobile apps, content and services. In short, the Google position for mobile is up for grabs and billions of dollars are at stake.
At Flurry, we are in the middle of that battle and have built solutions to help apps get discovered and acquire traffic. We watch the space very carefully. We have seen a lot of companies, large and small, try to solve this problem: Apple with Siri, Google with Search and Google Now, Facebook with App Install and App Conversion Ads, and myriad others. But recently we have been most intrigued by Android Personalization apps, also called Launchers, especially after the creation of Facebook’s Home and Yahoo’s acquisition of Aviate. So we have taken a closer look at this category and the chart below shows the very fast adoption and usage of these personalization apps on Android.
The majority of these apps offer a personalized homepage for Android, and do some form of app discovery and app launch.
There are over 4,500 apps in this category on the Flurry platform and the data shown represents the aggregate usage of these apps. It shows the number of app sessions recorded by Flurry in apps in the Android Personalization category, by quarter, since the beginning of 2012. The growth in that category is astonishing. In fact, Q1 2014 (and the quarter is not over yet) usage is higher than all of 2013. While the cumulative reach of these apps is still relatively small (30 million monthly users in the US), the usage growth is eye catching.
This data set is telling us something. In fact, this data set is telling us something big. It is telling us that consumers are eagerly waiting for an innovative service that help them discover apps, content, and services around them in a personalized way. While the numbers are still small, the fast adoption of these apps can’t be ignored. The battle for the mobile homescreen has begun. The battle for the “Google position of mobile” has entered a new phase, and it is “must-win” battle for many.
Developers devote a lot of attention to the time immediately after an app is launched. How quickly is it growing? Will it go viral? How is it ranking in app stores? While that launch period is critical, managing apps well throughout their entire lifecycle means also paying special attention to what happens after an app peaks. Does it decline precipitously or manage to hold much of its audience for a long time?
We explore the post peak phase of the lifecycle of mobile apps using the concept of a half-life, which for purposes of this analysis we define as the point at which an app’s monthly users (MAU) have declined to 50% of their lifetime peak.
Usage of Many Apps Decays Rapidly The First Few Months Post Peak And Then Levels Off
We start by looking at the overall rate of decay for 26,176 apps that peaked in the first half of 2011, 2012, and 2013. (That allows enough time for decay even for apps peaking in 2013 and also controls for the time of year in which the app peaked.) The chart below shows what proportion of apps were at what percentage of their peak MAU in each of the first ten months after they peaked. Apps in the gray band fell below 25% of their peak MAU by the month indicated, apps in the orange band had fallen below 50% but were still above 25%, apps in the green band were below 75% but above 50%, and apps in the blue band were above 75% of their peak MAU in the month shown in the horizontal axis.
As shown in the chart, decay is fairly rapid in the first few months post peak. A quarter of apps fall below half of their peak MAU the month after peaking (see the top of the orange band in the chart). That percentage grows to 43% in the second month post peak. In the third month post peak, just over half (52%) of apps fall below half of their peak MAU. The fourth month post peak is a critical benchmark: From this point on, MAU decay continues, but at a much slower rate (note the flattening of the color bands after the 4th month).
The overall pattern of app user decay has been remarkably stable over the past three years, but there is variation based on app category, size, and operating system. The table below shows median app half-life for apps within each grouping. This corresponds to the month in which the top of the orange band and the bottom of the green band intersect at the 50% line in the previous chart.
The biggest influence on the rate of app decay is category. Apps in utilitarian categories such as news and health decay at a much slower rate than apps in the more trend-driven games and social categories.
On average, apps that peak at 10,000 MAU or more enjoy a half-life that is two months longer than apps that don’t reach that level.
iOS apps typically reach their half-life a month later than Android apps.
Managing Decline Is As Important As Managing Growth
Many developers give a lot of thought to how to grow their apps, but we suspect fewer devote the same attention to managing their app’s decline. In some ways, this is analogous to people looking after their health as they age. The right habits can prolong longevity. In the case of apps, that means paying close attention to user retention and re-engagement – particularly as MAU growth begins to plateau and decline.
Those first few months post peak are key since the rate of decay levels off after about four months. More than half (56%) of apps that manage to hold more than half of their peak users for the first four months after they peak are still holding on to more than half of them ten months post peak. That could have a sizeable revenue impact. For example, consider an app that peaks at 100,000 monthly average users and has average revenue per user per month of $2.50. Holding at least half of those users through month four means the app has a 56% chance of holding them for another six months and that translates into revenue of $750,000 (100,000 users* half of them remaining *$2.50 per user per month * 6 months).
Just as actuarial tables help insurance companies anticipate costs, understanding typical app decay patterns can help developers and those who fund them anticipate app revenue streams. For example, assuming similar development costs and average revenue per user per month, a game app would need to peak with many more active users than a news app to have the same profit potential since its life can be expected to be a lot shorter. And it pays to invest in growing MAU for any app to the highest peak possible since that is also likely to mean the app will enjoy a longer half-life.
According to the U.S. Census Bureau, more than 12% of people in the U.S. speak Spanish at home, and nearly fifty million Americans are of Hispanic origin. The collective purchasing power of Hispanics is expected to reach 1.5 trillion dollars by 2015. Brands are clearly aware of the importance of this demographic group, and there are advertising agencies dedicated toward helping brands communicate with Hispanic consumers. Nonetheless results of some recent research suggest that brands are not doing enough to create positive app experiences for Spanish speaking consumers in spite of the fact that Hispanics in general are enthusiastic users of smartphones.
Last week’s Advertising Research Foundation forum on the intersection between mobile and culture inspired us to investigate what the overall U.S. appscape looks like from the perspective of Spanish-speaking device users. Flurry is able to do that because we can detect what language a user’s device is set to each time they start an app session, and we record data from over a billion app sessions each day in the U.S.
Defining Spanish Interest Apps
We started by defining Spanish Interest apps as those for which there is at least one U.S.-based user with their device’s language set to Spanish for every twenty set to English. We used this as an indication that a non-trivial proportion of the app’s users speak Spanish, indicating some level of interest in the app among Spanish speakers. As shown below, 15% of apps with fifty or more daily users in the U.S. were in this category.
Android Speaks Spanish
The overall percentage of Spanish Interest apps is in line with what you might expect given the prevalence of Spanish speakers in the U.S., but what’s surprising is how those apps are distributed across mobile operating systems. As shown below, nearly half of Android apps are Spanish Interest apps compared to less than 5% of iOS apps. In other words, 47% of Android apps have one or more user with their device set to Spanish for every twenty who have it set to English. That is only true of 4% of iOS apps.
It’s important to note that this may not be so much a reflection of app availability as it is a reflection of device ownership patterns since the apps a user can run are determined by their device’s operating system.
Spanish Speaking Android Users Love Games Even More Than Everyone Else Does
The apps that have the greatest number of U.S. users with devices set to Spanish as compared to English are mainly Spanish language apps (some originating from the U.S. and some from countries for which Spanish is the dominant language). Other than that, Spanish Interest apps span the full range of app categories but are disproportionately likely to be in the Game, Live Wallpaper, Personalization, and Photography categories in Google Play. As shown below, Spanish Interest apps are also over-represented in some iOS categories, but because the base rate on iOS is so low (4%) the absolute percentage of Spanish Interest apps is still relatively low even in categories in which they are over-represented.
Fans Of Pets, Sports, And Bargains
By definition, the audience for Spanish Interest apps includes Spanish speakers, but we wanted to find out what else we could learn about the audience for those apps. We did that by identifying which Flurry Personas (psychographic segments) are over- and under-represented in Spanish Interest apps. We found that Pet Owners, Sports Fans, and Value Shoppers are among the over-represented Personas and Auto Enthusiasts, Home and Garden Pros, and Real Estate Followers are among the under-represented. A more complete list is provided below.
Brands Don’t Speak Android
Many brands have taken a while to embrace mobile at all, and to the extent that they have they have tended to start with iOS. Some haven’t ventured any further. In some cases that is due to concerns about fragmentation or for brand safety in the more open Android ecosystem, but it is also due to the demographics of the user bases for iOS and Android. A considerable body of evidence suggests that, on average, iOS users are more affluent than Android users and they tend to spend more money in a variety of product categories.
Combine that with the tendency of Spanish Speakers to use Android devices, and it’s easy to understand why few brands have created Spanish language apps. The fact that some of the Personas most coveted by advertisers are under-represented in the apps in which Spanish speakers are most over-represented reinforces this point.
Given the size of the Spanish speaking population, the shift of consumer attention toward mobile, and the advertising budgets following them, this situation needs to change. Our results show that if marketers want to reach Spanish speakers on mobile they are going to need to do so using Android. That creates an opportunity – or really a necessity -- for Hispanic-focused advertising agencies to lead in creating high-quality brand promotion on Android. While Android users in the U.S. may be less affluent than iOS users, collectively they still have massive purchasing power, and world-wide, Android is even more dominant than it is in the U.S. Given the size of the Android audience world-wide, teaching brands to speak Android could pay big dividends well beyond those that can be generated from U.S. Spanish speakers.
Android has been a hot topic lately, with some arguing that it may become a unilateral smartphone superpower and others arguing that it has already peaked in the US market. A lot of this conversation seems to assume that Android’s (and by extension, Google’s) gain is Apple’s loss and vice-versa. We believe that the situation is more complex than that.
Two facts about Android are now well established: 1) Android smartphones now dominate many markets in terms of device shipments, but 2) The market for Android devices is famously fragmented. What’s less well-established is how and when all of those Android devices are being used and the implications of that for participants in the Android ecosystem and beyond. Those are the topics that we tackle in this post with a particular focus on Samsung devices and how their owners compare to users of other Android devices.
Smartphones Dominate On Android
This posts builds on a previous one we did exploring how people use iOS smartphones and tablets. As we will show, there are many similarities in usage patterns across the two operating systems, but one big difference is the overall breakdown between smartphones and tablets. In this May sample of 45,340 Android devices (of the 576 million Flurry measures), 88% were phones and 12% were tablets. The share of devices represented by smartphones is significantly greater than in our iOS sample, in which 72% of devices were phones. The emphasis on phones over tablets was even greater among Samsung devices in our sample: 91% were smartphones and 9% were tablets.
As in our previous post, we started our analysis by considering how the smartphone versus tablet distribution varies by psychographic segment. These are Personas, developed by Flurry, in which device users are assigned to segments based on their app usage. An individual person may be in more than one Persona because they over-index on a variety of types of apps. Those who own more than one device may not be assigned to the same Personas on all of their devices because their app usage patterns may not be the same across devices.
The Personas shown above the “Everyone” bar in the graph below skew more toward phones than the general population of Android device owners, while the Personas shown below the “Everyone” bar skew more toward tablets. (Android device ownership patterns for Personas not shown are not statistically different from those shown for “Everyone.”) In general, these follow a similar pattern to the one we saw for iOS. On-the-move type Personas, including Avid Runners, skew toward phones and more home-bound personas, such as Pet Owners, skew more toward tablets.
Within that broader pattern, there were differences based on the particular Android smartphone or tablet that a person owns. Samsung is the dominant manufacturer of Android devices. Its phones represented 59% of the phones in our overall sample of Android phones, and its tablets represented 42% of the tablets in our sample. Both its products and its promotion suggest that Samsung attempts to differentiate itself from other devices that share the Android operating system, and those differences were reflected in persona memberships.
Samsung Is Building A Unique and Attractive Audience
Owners of Samsung devices were disproportionately likely to be in many personas, including some of those most sought-after by advertisers (e.g., Business Travelers and Moms). Since Persona memberships are based on over-indexing for time spent in particular types of apps, this suggests that Samsung device owners are generally more enthusiastic app users than owners of other brands of Android smartphones and tablets.
Overall, owners of Android tablets spent 64% more time using apps than owners of Android smartphones. This ratio varied by category, as shown in the chart below. For example, owners of Android smartphones spent more than five times as much time, on average, in Business apps as owners of Android tablets. Sports and Photography were other categories that heavily favored phones. As with iOS, Education and Games skewed more toward tablets. (Average time spent using app categories not shown does not differ in a statistically significant way between Android smartphones and tablets.)
Once again there was variation by manufacturer. Overall, owners of Samsung phones spent 14% more time using apps than owners of other Android phones and owners of Samsung tablets spent 10% more time using apps than owners of other Android tablets. The particular categories of apps where time spent was greater for Samsung phones were News Magazines, Tools, Health and Fitness, Photography, and Education. Owners of Samsung tablets spent more time than owners of other Android tablets in Communication (e.g., voice over IP and texting) apps.
Android app use peaks between 8 and 11 pm. Comparing the two types of Android devices, a greater share of tablet use takes place from 3pm until 11 pm and a greater share of phone use takes place from 11 am to 3 pm and overnight. While the overall amount of time spent on Samsung devices is greater than for other Android smartphones and tablets, the overall time distribution throughout the day is similar.
Can Samsung Compete At Both Ends Of The Market?
As this and our previous post have shown, while smartphones capture more time in specific app categories, such as Navigation and Photography, those tend to be categories of apps used in short bursts. Tablets are favored for longer-duration app categories, such as Games and Education, and so, on average, tablet users spend more total time using apps than smartphone users. That makes tablets particularly interesting to content creators and to advertisers.
Samsung is the dominant manufacturer of Android devices. As shown in this post, it is attracting a unique audience relative to other Android devices. Owners of Samsung devices spend more time in apps than owners of other Android devices, and they are also disproportionately likely to be members of psychographic segments (Personas) that are attractive to advertisers. In those respects, they are more similar to owners of iOS devices than owners of other Android devices are.
But compared to iOS, a smaller share of Android devices are tablets, and that percentage is even smaller for Samsung devices than for Android as a whole. So the question is: will Samsung make as big of an impact in the tablet market as it has in the smartphone market?
In some ways, this comes down to a question of how it will balance its resources between two different types of markets: relatively more affluent countries that were early adopters of connected devices so new growth is now coming mainly from tablet adoption versus less affluent countries where smartphone penetration is still relatively low, but growing quickly.
A focus on tablets could enable Samsung to better develop more of a true ecosystem of its own (especially considering that they can include connected TVs as part of that) and the higher profits that go with that. Riding the wave of global smartphone growth is more of a high volume / low margin strategy. Of course, they could try to compete at both ends of the market, but each individually may require a lot of resources because of Apple’s (and to a lesser extent, Amazon’s) strength in the tablet market and the number of hungry competitors anxious to grow along with the Android smartphone market. If they can do both, they will rule the Android Kingdom, and Samsung, rather than Google, will pose the greater threat to Apple.
Smartphones and tablets have gone from being the latest gadgets for relatively affluent people in relatively affluent countries to ubiquitous devices in mainstream use in many countries around the world. In fact, as we reported in February of this year China surpassed the US to become the country with the largest installed base of connected devices as measured by Flurry Analytics. As we also reported, a second wave of countries around the world is now experiencing the type of growth mobile pioneer countries experienced previously. For example, the mobile markets in the BRIC countries are now all growing faster than the mobile markets in the U.S., U.K., and South Korea.
Knowing that the landscape is constantly shifting, we are beginning a series of blog posts reporting on the use of smartphones, tablets, and apps in particular countries and geographic regions around the world. Given China’s world-leading installed base and considering the China Joy conference (China’s largest digital conference) is this week we thought we would begin there.
In June of this year Flurry Analytics measured 261,333,271 active smartphones and tablets in China. That represented a whopping 24% of the entire worldwide connected device installed base measured by Flurry. The chart below documents the growth in the installed base. The left axis and blue line show China’s growth over the years. The right axis and red line show growth in the world as a whole (including China) a basis of comparison. As can be seen from the gap between the two lines growing through 2010 and much of 2011, growth in smartphones and tablets in China lagged the world as a whole through that period. But starting toward the end of 2011, the installed base in China began a period of exponential growth. During this period it surpassed the growth rate for the world as a whole, as shown by the blue line catching the red line in the graph. We expect China to maintain its leadership (in terms of active installed base) for the foreseeable future because device penetration rate is still relatively low and much opportunity remains, as we reported in a previous post.
Xiaomi Is A Local Manufacturer To Watch
Examining a random sample of 18,310 of the devices in our system in China that run iOS or Android apps revealed that Apple and Samsung are the top two device manufacturers, as they are most everywhere. China’s own Xiaomi was a strong third, with a 6% share of the market, ahead of HTC, Lenovo and a multitude of others. As we noted in a previous post, Xiaomi has been successful in accumulating a large number of active users for each device model it releases. Worldwide, only Apple, Amazon, and Samsung have more active users for each device model released.
It will be interesting to see if Xiaomi can continue to gain share in China – possibly by mopping up share from smaller manufacturers of Android devices – and also if they can begin making gains in other markets outside of China to become more of a global player. With rumors of a Xiaomi tablet circulating, we will also be watching to see if their entry into the tablet market will increase the use of Android tablets in China. Currently 21% of the iOS devices in our randomly drawn sample were tablets compared to only 4% of the Android devices.
Chinese Users Over Index in Reading, Utility, Productivity
In looking at how Chinese people use their connected devices we see similarities and differences compared to the rest of the world. As a general rule worldwide, games dominate time spent in apps measured by Flurry Analytics, and China is no exception. On average, Chinese owners of iOS devices spent 47% of their app in games. The percentage of app time devoted to games was even greater for Android at 56%.
Smartphones and tablets are not just about fun and games in China. Compared to iOS device owners elsewhere, the average time Chinese owners spend using Books, Newsstand, Utility, and Productivity apps is greater than the rest of the world (1.8x, 1.7x, 2.3x, and 2.1x respectively). On average Chinese owners of Android devices spend more than seven times as much time in Finance apps (7.4x) than Android owners elsewhere spend in Finance apps, but they also spend more time in Entertainment apps (1.7x).
Will China’s Exponential Growth Change The Device And App Markets?
It will be interesting to see how China now having leadership in terms of its installed base will impact the device and app markets elsewhere. Given Xiaomi’s success at building a large number of users for each model it releases, it might try to add further scale by expanding internationally – particularly to the other rapidly-growing BRIC markets where brand preferences are not already well-entrenched.
Within China itself, Chinese competitors may have an even greater advantage in the app market since cultural influences and differences are likely to be even more important in the app market than in the device market. There are already strong Chinese app companies such as Baidu and Tencent and clusters of app developers emerging in places like Chengdu
. At first they are likely to concentrate on apps for the large local market, but that may eventually lead to growing app exports. For example, the fact that Chinese consumers over-index on some more work and educational-oriented apps may encourage Chinese developers to focus on those areas and innovate, and that could lead to creation of apps that end up being adopted elsewhere in the world. We’re looking forward to discovering what app is to China what Angry Birds was to Finland
Apps are telling – they signal our personal tastes and interests. There are probably nearly as many unique combinations of apps as there are devices, and the apps we use reveal a lot about us. Based on Personas that Flurry has developed for its advertising clients, we are beginning a series of blog posts to shed light on different groups of smartphone and tablet users and their app usage patterns. Moms -- who often control household budgets and expenditures -- are considered the prime audience for many brands. So we thought, where better to start our Personas series than by examining what moms are doing with apps?
Our analysis for this post relies on iPhone, iPad, and Android app usage during May of this year for a large sample (24,985) of American-owned smartphones and tablets. Discussion of app usage is based on time those devices spent in the 300,000+ apps that use Flurry Analytics.
What Apps Do Moms Use?
Moms, like most other groups, spend a lot of smartphone and tablet time playing games. In fact, on Android, more than half of the time American Moms spent in apps was spent playing games. Similarly, on iPad moms spent about half their time in games, but on iPhone, that percentage drops to a little less than a third of their time. On iPhone, lifestyle apps capture a larger proportion of Moms' attention (12%) than on iPad and Android devices.
As shown below, the second most popular category among moms on iPhone and Android devices is social networking. On iPad, newsstand (24%) was the second most popular category, demonstrating its strength as a screen for displaying magazine type content.
Where Do Moms Over-Index?
Most mobile consumers spend a large proportion of their app time in gaming and social networking apps, so what makes moms different from the other American owners of smartphones and tablets? Across iPhone, iPad, and Android, American Moms spend more time in education apps than the general population. Also, moms who own an iPhone or an Android device spend a greater share of their app time in health and fitness apps. Unsurprisingly, moms are also heavy shoppers. Android moms over-index for time spent in shopping apps, and iPhone moms over-index for time spent in catalog and lifestyle apps. (For this post, we have honored The App Store and Google Play’s systems for classifying apps. In iOS, shopping apps can fall into either the catalog or lifestyle category, whereas Android has a dedicated “shopping” category.)
Moms Own More Tablets And Gravitate Toward iOS
Compared to other American device owners, moms are enthusiastic users of tablets. As shown below, among the general population 25% of connected mobile devices were tablets, but for moms that percentage is 35%. This could be driven by the fact that many parents use tablets for sharing games and stories with their children.
60% of the smartphones and tablets we looked at were iOS devices. (Note that this number is a function of the installed base of active devices, so does not reflect market shares from sales in recent quarters.) For American Moms, the numbers lean even further toward iOS devices. A whopping 77% of moms own iOS devices while just 23% own Android. There are at least two factors that may explain this. First, it could be a function of Moms’ greater tablet ownership since iPad dominates the tablet market. Second, surveys show that women in general skew toward iOS devices. The key takeaway is that moms are much more likely to be found using iOS devices than Android devices.
For Moms, Connected Devices Are More For Escape Than Utility
So what can we infer about American Moms based on their app usage? For one thing, it appears that they use smartphones and tablets as a refuge from their busy lives. On average, half or more of the time they spend in apps is spent on social networking and game apps. In this sense, they are not that different from other Americans, but it does show that even busy moms need to escape and socialize, and mobile devices provide a way to do that.
Apps where American Moms spend a disproportionate share of time relative to other Americans also tell us something about their more serious side. Those apps tend to be improvement-oriented: education and health and fitness, for example. Moms are using their devices to help them achieve personal goals and possibly to educate their children.
We hope this post gives brands and developers a better idea of where the coveted American Mom is most likely to be during mobile time, and what is capturing their attention. App developers can tap into this valuable group by building experiences that give moms an escape from their hectic day-to-day routine, keep them socially connected, and help them improve different aspects of their lives. Media planners who want to reach American Moms should continue to buy ad inventory in gaming, news / magazine, and social networking apps, and to weight their budgets toward iOS apps.
Over the past four years, Apple’s iOS and Google’s Android have been locked into a two horse race for mobile OS ownership. In the past year, there has been a lot of focus on the rise of Android and its lead in device market share. More recently, many analysts started questioning the true value of Android’s market share especially in the high-end smart phone and tablet markets. At Flurry, we felt that it was important to take a step back and look beyond straight device or activation numbers to simply understand what market or markets are being contested.
In this report we do just that, arguing that there is more than one race for mobile market share occurring simultaneously. We analyzed four years worth of Flurry’s data to understand who is ahead in which contests, discuss the apparent strengths and weaknesses of the competitors, and consider the implications for the overall mobile ecosystem.
Android Leads In Device Market Share
It is clear from announcements from device manufacturers such as Apple and Samsung that Android is winning the race for device market share. Flurry’s own data supports this. The number of Android devices we are tracking worldwide doubled in the past year, reaching 564 million as of April of 2013. While the installed base of iOS devices that we track has also grown over that time, Android pulled ahead in active device share in late 2012 and has maintained that position ever since. This is shown in the chart below. This lead followed a period of just over a year in which the number one spot was changing hands. Prior to that Apple dominated the connected device market following the launch of first iPhone and then iPad. Approximate launch dates of some of the major iOS and Android devices are also shown on the chart as points of reference.
iOS Leads In App Market Share
In spite of Android’s rapid rise and current lead in device market share, iOS continues to lead in terms of time spent in apps. Total time in Android apps nearly equaled that in iOS apps in March of 2012, but it has declined somewhat since then, after the launch of the 3rd generation iPad.
Considering that there are more active Android devices than iOS devices but iOS users collectively spend more time in apps, it’s not surprising that more time per device is spent in iOS apps than in Android apps. The exact proportion of time spent in apps per Android device relative to iOS devices is shown below.
Why Doesn't App Share Follow Device Share?
An obvious question that arises when looking at the charts above is why app usage shares don’t follow device shares. We think there are at least three possible explanations.
One is that at least up until now the two dominant operating systems have tended to attract different types of users. Once Apple established the app ecosystem many of the consumers who purchased iOS devices were doing so to be able to run apps on those devices. They were buying a computer that fit in their pocket or purse. In contrast, many Android devices were provided free by carriers to contract customers upgrading feature phones. To the extent that those customers were just buying replacement phones, apps may be a nice add-on, but not a central feature of the device.
A second possible reason for why Android’s share of the app market lags its share in the device market is that the fragmented nature of the Android ecosystem creates greater obstacles to app development and therefore limits availability of app content. Hundreds of different device models produced by many manufacturers run the Android operating system. App developers not only need to ensure that their apps display and function well on all of those devices, but they also need to contend with the fact that most devices are running an old version of Android because the processes for pushing Android updates out to the installed base of Android devices are not nearly as efficient as those for pushing iOS updates to iOS device owners.
The final possible explanation for the differences in device and app usage shares relates to the first two. It is that the arguably larger and richer ecosystem of apps that exists for iOS feeds on itself. iOS device owners use apps so developers create apps for iOS users and that in turn generates positive experiences, word-of-mouth, and further increases in app use.
While app share and device share are two key races in the competition for mobile supremacy, they are not the only races. Another that has been in the news recently is the race for profits, in which Apple is the clear leader. Apple also currently appears to be winning the race for developer attention – probably both because of its share of app usage as described above and because both surveys and anecdotal evidence indicate that iOS device owners tend to generate greater advertising and in app purchase revenue.
A side race that Android appears to be winning is that for the emerging world, where its lower prices and open architecture give it an advantage. Apple has taken notice of that and is fighting back with incentives, monthly payment plans and cash backs in several emerging countries. In India, for example, a Times of India article suggests that these programs have given the iPhone a 400% boost in sales in the past few months.
As we’ve shown, there are multiple contests for mobile market share occurring simultaneously. That raises a question about whether that is a temporary state that will eventually give way to a clear overall winner or if there can be multiple long-term winners. For the moment it seems as though the consumer is winning in that they are able to choose devices from two dominant ecosystems as well as several smaller ecosystems.
Flurry now measures apps used on more than 1 billion smartphones and tablets each month. As connected devices reach critical mass, marketers are more seriously incorporating mobile into the marketing mix. But there are pros and cons. While the collective size of the mobile audience is rivaling that of TV and other media, it still requires aggregating the audiences of many apps to reach what can be reached through a few TV programs. That said, the numbers are likely closer than you think. Additionally, mobile offers unique ways to engage consumers given its “always on, always present” characteristics.
In this report, we look into what it takes to reach comparably sized audiences across different media like television, print, online and mobile apps. We also drill down into how the size and engagement of the mobile app audience varies across days of the week and hours of the day, and how it presents unique opportunities.
Let’s start by considering when people use apps.
The chart above shows how app usage varies over the course of a day, cut by weekend versus weekday. Data used for this chart comes from the top 250 iOS and top 250 Android apps measured by Flurry Analytics during February 2013. Through the top apps Flurry sees, app usage spikes during primetime to a peak of 52 million consumers. Make a mental note of that number, because we’ll revisit it a little later.
Comparing weekday to weekend curves, the general shape is similar. App usage ebbs overnight and then grows throughout the day, peaking in the early evening. While weekends also have a distinct primetime window, they see higher daytime usage across the day between 9:00 AM – 5:00 PM, ostensibly when someone would normally be working. However, the overall difference in audience size during the day between weekdays and weekends is not substantially different. Let’s look at 11:00 AM, for example, when the number of people using apps varies the most between weekdays and weekends. The size of the audience during this time is only 25% greater on weekends. Looking at it another way, this means that during the normal workday, people use apps at least 75% as much as they do on weekends. This creates a unique opportunity for advertisers to reach desired audiences over the course of the day via mobile.
The App Audience: Big But Fragmented
Now, let’s return to that 52 million primetime app user number. To get to an audience of that size, you’d need to combine the circulation of the largest 200 weekend newspapers in the U.S. or combine the audiences for the 3 most highly rated primetime TV shows during a good TV week (e.g., The Big Bang Theory).
We believe this comparison says a couple of important things about the app audience: first that it has reached critical mass, and second that it is still highly fragmented relative to more traditional forms of media. Additionally, while we don’t compare costs in this study, it is far more affordable to reach an audience on mobile versus Print or TV.
Now let’s consider how the app audience compares to the audience that is reachable through larger digital devices like laptops and computers. Flurry measured 224 million monthly active users of mobile apps in the United States in February of this year. During the same month, comScore counted 221 million desktop and laptop users of the top 50 digital properties in the United States. From this, we conclude that the U.S. audience that is reachable through apps, albeit more fragmented, is now roughly equal to that which can be reached on laptops and desktops.
There’s An Audience for That, on Mobile.
Earlier this year, Morgan Stanley analyst Benjamin Swinburne showed that “There has been a 50 percent collapse in broadcast TV audience ratings since 2002.” As the prized 18 – 49 year old demo is further lured to digital media, marketers need to adjust. But the mobile industry also needs to do more to make media planning and buying more efficient for advertisers and agencies.
The more mobile ad networks increase their ability to deliver the right combination of reach and targeting, the easier it will be for advertisers to invest in mobile and leverage the unique value it offers. Mobile, in particular, can deliver different ads to different users within the same app or the same ad to similar types of people across different apps, based on the varying interests of those individuals. Dynamic segmentation is much more possible on mobile compared to earlier forms of broadcast media. Now, fast forward one year from now, by which time Flurry estimates the installed base of smartphones and tablets will have doubled to 2 billion active devices per month. That should leave marketers of nearly every product thinking: on mobile, there’s an audience for that.
Five years ago, the iPhone ushered in the era of mobile computing. Today, more than a billion consumers are “glued” to these devices and their applications, impacting nearly every aspect of their lives. For businesses, opportunities seem endless and disruption is everywhere. The list of disrupted industries is long, including communications, media and entertainment, logistics, education and healthcare, just to name a few.
The past five years at Flurry have been wildly exciting. We joined an industry just as gas was forming to ignite a Big Bang, and we’re still orienting ourselves within its rapidly expanding universe. Since early 2008, we’ve worked with tens of thousands of developers to integrate our analytics and ad platforms into their apps. Today our services have been added to more than 300,000 applications and we measure usage on more than 1 billion monthly active smart devices.
On the five-year anniversary of launching Flurry Analytics, we took some time to reflect on the industry and share some insights. First, we studied the time U.S. consumers spend between mobile apps and mobile browsers, as well as within mobile app categories. Let’s take a look.
Today, the U.S. consumer spends an average of 2 hours and 38 minutes per day on smartphones and tablets. 80% of that time (2 hours and 7 minutes) is spent inside apps and 20% (31 minutes) is spent on the mobile web. Studying the chart shows that apps (and Facebook) are commanding a meaningful amount of consumers' time. All mobile browsers combined, which we now consider apps, control 20% of consumers' time. Gaming apps remain the largest category of all apps with 32% of time spent. Facebook is second with 18%, and Safari is 3rd with 12% Worth noting is that a lot of people are consuming web content from inside the Facebook app. For example, when a Facebook user clicks on a friend’s link or article, that content is shown inside its web view without launching a native web browser (e.g., Safari, Android or Chrome), which keeps the user in the app. So if we return to the chart and consider the proportion of Facebook app usage that is within their web view (aka browser), then we can assert that Facebook has become the most adopted browser in terms of consumer time spent.
The App World
Five years into its existence, the app economy is thriving, with The Wall Street Journal recently estimating annual revenue of $25 billion. Once again, we have to appreciate that this economy did not exist until 2008. As we looked for possible signs of slowing, we could not find any, largely due to the fast adoption of tablets just after smartphones.
In fact, not only is the installed base of devices growing, but also the number of apps consumers use. Our next insight comes from studying how many apps the average consumer launches each day. For this snapshot, we compared three years of worldwide data, taking the 4th quarters of 2010, 2011 and 2012.
From left to right, we see that the average number of apps launched per day by consumers climbs from 7.2 in 2010 to 7.5 in 2011 and finally to 7.9 in 2012. This is not a material change, which is a good thing. To us, the steady growth rate indicates that the app economy is not yet experiencing saturation, as consumers steadily use more apps over time. And while there are more apps in the store, large numbers of them have short lifespans, such as books, shows and games. Assertions that people are using fewer apps in 2012 than they did in 2010 appear to be incorrect. While one could observe that consumers use only 8 apps per day among the million+ available between the AppStore and Google Play, one also needs to remember that the 8 apps each consumer uses varies widely. This creates a marketplace that can support diversified apps.
Finally, we studied a sample of more than 2.2 million devices that have been active for more than 2 years to understand the mix of new versus existing apps people use over time. To do so, we compared Q4 2012 to Q4 2010.
The chart above shows that, on average, only 17% of the apps used in Q4 2010 were in use earlier in the year on a device compared to 37% in Q4 2012. That means that 63% of the apps used in Q4 2012 were new, and most likely not even developed in 2011 (or possibly poorly adopted). We believe that with consumers continuing to try so many new apps, the app market is still in early stages and there remains room for innovation as well as breakthrough new applications.
The Web World
Looking again at the first chart in this study, while also considering the latest numbers from IDC, which projects that tablets will outsell desktops this year and notebooks next year, we draw the conclusion that the web, as we know it, is already facing a serious challenge. Does this mean the web is dead? We don’t believe so. On the contrary, we believe that the web will change and adapt to the reality of smartphones and tablets. Websites will look and behave more like apps. Websites will be optimized for user experience first and search engine optimization second. This supports the trend of mobile first and web second, which brings both mobile app and user experience design to the mobile web. Simply compare Target’s app on iPhone to its mobile web site (target.com) accessed from the iPhone. The mobile web site looks and behaves similarly to the Target app, albeit a little bit slower.
… and Facebook
Continuing to think about the first chart, it appears that mobile, once perceived as Facebook’s Achilles' heel, has become Facebook’s biggest opportunity. Consumers are spending an average of nearly 30 minutes per day on Facebook. Add to that Facebook's massive reach, as well as their roughly billion mobile users per month and you have a sizable mobile black hole sucking up peoples' time. The 30 minutes a day is a worldwide average which means a large group spends even more time on Facebook (possibly hours) watching and participating in what has become the ultimate reality show in which the actors are you and your friends.
The disruptive force of the mobile app economy has created opportunities, rising stars, instant millionaires, dinosaurs and plenty of confusion. However, one undeniable truth is that tablets and smartphones are eating up desktops, and notebooks and apps (including the Facebook app) are eating up the web and peoples’ time.