More iOS and Android devices are activated on Christmas Day than on any other day of the year. This year was no exception. On this Christmas Day 2012, more iPhones, iPads, Galaxys, Kindle Fires, and more, were activated than on any other day in history. Moreover, as soon as we could tear the wrapping paper off our cool new devices, we started downloading a record volume of apps. Let’s get into the numbers.
How Did Santa Fit All Those Devices Into His Sleigh?
The chart below shows the number of new iOS and Android devices detected worldwide by Flurry on Christmas Day. With more than 260,000 apps using Flurry Analytics, Flurry detects over 90% of all new iOS and Android devices activated each day. The company regularly triangulates its device coverage with publicly announced figures from Google and Apple.
In order to appreciate the magnitude of new devices activated on Christmas Day, Flurry established a baseline using the average from the first 20 days of December. Over this period, daily activations averaged around 4.0 million per day, with variance of a few hundred thousand in either direction per day. On Christmas Day, activations soared to more than 17.4 million, a 332% increase over the December baseline. By comparison, Christmas Day 2011 held the previous single-day record, having reached 6.8 million device activations. Christmas 2012 is more than 2.5 times larger than Christmas 2011, which surpassed its own baseline by more than 300%.
With a record number of iOS and Android devices flooding the market, we next look at the surge in app downloads. For these figures, Flurry estimates its percentage penetration per platform to estimate total market app downloads. The company also benchmarks download volumes tracked in its system against publicly released app download milestones from Apple and Google.
More App Downloads Than Partridges in Pear Trees
The above chart shows that, compared to the baseline, app downloads more than doubled on Christmas. Specifically, over the December 1 – 20 baseline, download volumes increased by 112% on Christmas. Despite the ever-growing installed base of existing smart devices, the influx of new devices on Christmas Day still helped deliver a record download day, besting that of any previous day in history.
It Was Christmas All D*mn Day
For our next chart, we look at the distribution of downloads per hour across Christmas Day 2012. The shape of this curve looks like a table top, with downloads jumping early in the day to around 20 million per hour, when most of us were still in our pajamas, and remaining at this level for most of the day, even after the egg nog was gone. For perspective, we compare this to the average distribution of downloads per hour clocked between December 1 – 20.
More of Us Asked Santa for Tablets This Year
For our final chart, we drilled down into the split between smartphones versus tablets. While smartphone activations typically outpace that of tablets by 4:1, on Christmas Day 2012, more tablets were activated than smartphones. The big winners were Apple iPads, Apple iPad Minis and Amazon Kindle Fire HD 7” tablets. In particular, Amazon had a very strong performance in the tablet category, growing by several thousand percent over its baseline of tablet activations over the earlier part of December.
Over the next week, up through New Year’s Day, app download rates will remain significantly elevated. Flurry anticipates downloads to surpass more than 1.5 billion, and have a shot at breaking through the 2-billion download barrier for the first time ever. We look forward to accelerated growth in 2013, and continued success for developers.
Marshall McLuhan popularized the idea of the “global village” in the 1960s through his books The Gutenberg Galaxy: The Making of the Typographic Man and Understanding Media. McLuhan, who is credited with predicting the concept of the Internet decades before it actually existed, described the instantaneous movement of information from every quarter to every point at the same time, enabled by electric technology. The result is that the globe contracts into a village.
Post-Internet, the explosive adoption of iOS and Android smart devices best extends his theory. Enabled by this new computer-mediated platform is the distribution of apps, from every quarter to every point, at the same time. Consider that in the United States today, right now, teams from Finland, Japan, Israel and the UK share top grossing positions alongside U.S. teams in the iTunes App Store and Google Play. Today, in the top Chinese app stores, one can find American, French and Japanese companies alongside Chinese companies for a top share of revenue. And in the top UK app stores, companies from Serbia, Finland, Japan, China and the U.S. are counted among local UK companies as top revenue generators.
Welcome to the new global village built on a foundation, per Flurry’s count, of three quarters of a billion active iOS and Android smart devices, simultaneously running across more than 220 countries and territories that will generate revenue approaching $10 billion in 2012. This report focuses on the further shrinking of the global village, driven by the prolific spread of global smart devices over the last 12 months. We show which countries have the largest active smart device installed bases, are experiencing the fastest growth and how the distribution of app usage is shifting to become increasingly international. For its analysis, Flurry uses data from more than 250,000 applications that it tracks, running on more than 750 million devices worldwide. With its application coverage, Flurry estimates that it can reliably detect over 90% of all iOS and Android devices active in the world during a given month.
Let’s start by looking at which countries make up the world’s largest app markets.
The chart above shows the top markets by their active iOS and Android user bases during October 2012. The US and China tower over the next group of top markets by at least five times. And while the U.S. has added a whopping 55 million net active devices since October 2011, China has added a dizzying 125 million, a figure that totals the sum of the UK, Japan and South Korea’s combined, current active user base. Flurry predicts that China will surpass the U.S. in total installed base by the end of Q1 2013, delayed only by the upcoming massive holiday season that will spike the U.S. installed base.
The chart above shows the growth in active devices per country between October 2011 and October 2012. China leads the world with an impressive 293% year-over-year growth rate, spurred by the potent combination of its vast population and rapidly growing middle class. For this chart, Flurry selected countries that had a minimum of a half a million active devices as of October 2011. Compared to prior Flurry international growth studies, we note that a new set of fast-growers has now entered the top 10 including Colombia, Ukraine, Venezuela and the Philippines, further demonstrating the shrinking global village.
Lastly, we look at the volume of application usage across the globe tracked by Flurry, which we estimate comprise of approximately one fifth of all worldwide app sessions on iOS and Android, the world’s largest cross-platform sample. Year-over-year app sessions in the U.S. declined as a proportion of WW sessions between October 2011 and October 2012, from 48% to 29%. The balance of the top 10 (ranks 2 -9) grew from 27% in October 2011 to 39% in October 2012. The rest of the world also made gains from 25% in October 2011 to 32% in October 2012. In total, 71% of all app sessions now take place outside the U.S.
Over the last century, the distribution of the world’s information has migrated from print (e.g., books and newspapers) to mass media (e.g., radio and television) to computer-mediated media (i.e., the Internet). Over just the last five years, however, we’ve taken the most significant step forward in the evolution of media distribution with the unprecedented adoption of smartphones and tablets: portable, broadband-connected super computers connected to The Cloud. Applying McLuhan’s point of view that “the message is the media,” apps are the new message.
While smartphones have reached critical mass, tablets are poised to do the same soon. As a form factor, tablets simultaneously take a step toward the living room and the workplace. For consumers, these devices are multimedia machines, offering a glimpse into how consumers might one day accept connected television. For workers, IT departments are already reacting to the “Bring Your Own Device” wave changing the modern workforce. According to Forrester, 12% of workers already use a tablet at work.
The stakes are high. According to its latest earnings call, more than one out of every three Apple smart devices sold during the last quarter was a tablet, 14 million iPads versus about 27 million iPhones. And with the announcement of the lower-priced iPad mini, more directly competing with Amazon’s Kindle Fire HD, Google’s Nexus 7 and Samsung’s Galaxy Tab 2, we anticipate this ratio to increase more toward tablets during the holiday season.
This report focuses on how consumer demographics and behavior vary between smartphones and tablets. Taking a snapshot in September 2012 from Flurry Analytics, that totaled more than 6 billion application sessions across approximately 500 million smart devices, Flurry provides a comprehensive comparison between smartphones and tablets, spanning age, gender, time of day usage, category usage and engagement metrics. For age and gender comparisons, Flurry leverages a panel of more than 30 million consumers who have opted-in to share demographic data.
The chart above shows the distribution of age for smartphone versus tablet users across traditional age groupings (aka “age breaks”). The blue bars represent smartphone consumers and greens bars represent tablet consumers. Each group of same-colored bars totals 100%. On average, smartphone users are younger than tablet users, 30 versus 34 years of age. Nearly three quarters of smartphone users are 34 years of age or younger, while more than two thirds of tablet user are 25 years or older. Additionally, recent research from the OPA conducted by Frank N. Magid and Associates indicates that household incomes for tablet owners are becoming increasingly affluent, with 59% of household incomes for tablet owners surpassing $50,000 versus the U.S. average of 41% households with incomes over $50,000.
The pie charts above compare the gender split between smartphone and tablet users, with women shown in dark pink and men shown in blue. While smartphone usage trends slightly more male, tablet usage is nearly even. Traditionally, males adopt technology devices more than women. With an even gender split for tablets, this bucks the trend, indicating that tablets likely have more long-term mass-market appeal.
The chart above shows how consumers allocate their time using apps across a day, also called “dayparting.” Smartphone app usage is indicated with the blue line, and tablet app usage with the green line. Each line spans 24 hours of a day and totals 100% usage across the day. Studying the chart, tablets have a greater spike of usage during the prime-time television window, from 7 pm to 10 pm, whereas smartphone usage is more evenly distributed throughout the day. This would indicate that tablets are more often used alongside, or instead of television viewing than smartphones. In an earlier study, Flurry compared the combined usage of tablet and smartphone apps versus the Internet and television.
The chart above compares the time spent across app categories between smartphones and tablets. At a high level, consumers spend more time using tablets for media and entertainment, including Games (67%), Entertainment (9%) and News (2%) categories which account for nearly four-fifths of consumption on tablets. Smartphones claim a higher proportion of communication and task-oriented activities with Social Networking (24%), Utilities (17%), Health & Fitness (3%) and Lifestyle (3%) commanding nearly half of all usage on smartphones. Games are the most popular category on both form factors with 67% of time spent using games on tablets and 39% of time spent using games on smartphones. Further reinforcing that tablets are “media machines” is the fact that consumers spend 71% more of their time using games on tablets than they spend doing so on smartphones.
Finally, we compare engagement metrics between smartphones and tablets. On average, consumers use apps on smartphones more frequently but for shorter periods of time. With consumers using tablets more for media consumption, and during the evenings, this stands to reason. Conversely, consumers use their smartphones for shorter periods of time across more sessions over the course of a day to complete tasks like checking into social networks and using utility apps.
The Battle for the Living Room
Studying smartphone versus tablet usage differences not only provides insight into how developers should consider form factor when designing app experiences, but also how digital distribution could disrupt the living room. As we imagine a world of connected TVs, tablet usage gives us the best current-day hint of that world to come. Tablet users are older, more female, and we can surmise, more affluent. Additionally, they use more during the evenings and for longer sessions. Finally they consume more media and entertainment experiences, with a significant proportion spent on games. In particular, this would indicate that as Apple and Google enter the living room with connected TV initiatives, game consoles made by Sony, Microsoft and Nintendo would experience the greatest competition. The distribution of content into the living room may also significantly change for network and cable television content providers. In summary, the impact of smart devices on both work and play are profound. With a bevy of significant companies vying for tablet hegemony, including Apple, Google, Amazon, Microsoft and Samsung, developers and consumers should expect nothing short of tremendous innovation.
A Note about Engagement Metrics in this Study versus Previous Flurry Studies
Please note that in previous studies, Flurry combined all smartphone and tablet usage to generate total time spent by the average “smart device” user in a given day. Using the stats provided in this study, a clever reader could back into a comparison to that study. However, breaking out time spent per day using the metrics included in this study (by taking ‘number of sessions per week’ multiplied by ‘time per session’ then dividing by seven days to get to a daily figure) will not simply add up to the total ‘time spent per day’ provided in previous studies. This is because individual users of smartphones and tablets spread their total usage time across multiple devices. By separating out smartphone and tablet usage for this study, the overlap of users who have more than one device is not taken into account. In short, these two studies do not provide an apples-to-apples comparison.
Regardless of a company’s earlier success, thriving in the new mobile app economy depends on engagement and retention. After acquiring users, the real battle to keep and ultimately monetize consumers begins. In the brave new world of “mobile first,” engagement is the new battleground.
This research is a redux to one of Flurry’s most popular reports, entitled Mobile Apps: Money, Models and Loyalty. Released three years ago, the initial report organized app category usage into a loyalty matrix. We do the same again now, while also acknowledging that a lot has changed in the app economy since then. To start, there is an order of magnitude more available apps in the App Store, now brimming with over 700,000 app choices for consumers. We are three generations beyond the then-new iPhone 3GS. We have since met the iPad, and perhaps tomorrow will meet the iPad Mini.
Combined, smart devices – iOS and Android smartphones and tablets – are the fastest adopted technology in history; adopted faster than electricity, televisions, microwaves, personal computers, cell phones, the Internet, dishwashers, stoves, and a whole lot more. Last month, Mark Zuckerberg, CEO of Facebook – the number two most visited website on the web – declared “we are now a mobile company” explaining that “you just could do so much better by doing native [application] work” versus using languages like HTML5 on top of browsers. Each month, approximately 600 million of Facebook’s 1 billion monthly active users already accesses Facebook via mobile.
Each app category has different user engagement and loyalty characteristics. Understanding a given app audience based on the category to which it belongs can inform a company’s app acquisition, retention and monetization strategies. For this analysis, we use a sample of apps used more than 1.7 billion times each week. In total, more than 80,000 companies use Flurry Analytics across more than 230,000 apps to understand consumer behavior and improve their apps.
The above matrix plots application categories by how often they’re used compared to how long consumers continue to use them over time. Specifically, we plot the 90-day retention rate of app categories on the x-axis against the frequency of use per week on the y-axis. We lay the “scatterplot” out in a Cartesian coordinate system with four quadrants. For our categories, we started by taking the application categories defined by Apple in the App Store. In cases where a cluster of applications within a parent category showed meaningful usage differences, we created a sub-category. For example, Flurry divides games into Social Games and Single Player Games given how differently consumers use these sub-categories.
Quadrant I includes apps that are used intensively and to which consumers are loyal over time. News and Communication apps are the two categories that appear in this category. On average, because these apps tend to have stable, growing audiences, they are best positioned to generate advertising revenue or charge a subscription. Consumers perceive these apps to deliver enduring value over time.
Quadrant II is comprised of apps that are used intensively, but for finite periods of time. They are perceived by consumers to deliver value in bursts. Streaming Music, Dating and Social Games best typify this quadrant. Consider for a moment why Dating is a category that appears in this quadrant. For most people, we can assume that finding a long-term “significant other” is the ultimate goal of dating. As a result, the app maker should expect customer churn. While usage may be high during the time when a consumer looks for a suitable partner, once that person is found, usage stops. An implication could be that to maintain a growing audience, apps in this category require heavy, constant acquisition to find consumers who are “in the market” for dating. Ironically, the better the app is at match making, the more churn it should expect.
Quadrant III contains apps that are used infrequently and have high churn. They contain the most “one-and-dones.” Personalization is an example that makes sense for this quadrant, since a consumer uses this app to change her screen saver or select a theme for her operating system. Once this set-up is complete, it’s unlikely that the user will need to re-use this application. Since the app’s value is diminished almost immediately, applications with this kind of usage pattern are best served with premium pricing models; that is, charging the consumer before providing access to the content.
Quadrant IV is made up of apps that are used infrequently but deliver very high value when used. Even though they’re used only occasionally, these apps can remain on a consumer's handset almost indefinitely. For example, consider how useful an airline, hotel or rental car-booking app is to a business traveler. While the app remains unused between business trips, its value spikes as soon as the next business trip needs to be scheduled.
Which Pill to Take
The quadrant an app falls into can help the content creator decide what business model is best. On average, Quadrants I and IV (the right-hand side) are better suited to subscription and advertising-supported models. The main reason is that these apps have perceived enduring value by consumers over a long period of time, and therefore more successfully retain their user bases. For ad-supported apps, high repeat usage translates into more ad impressions served. Categories on the left-hand side, Quadrants II and III, are better suited for one-time download fees. Additionally, quadrants II and IV (top left and bottom right) are likely best for in-app purchase models. For Quadrant II, the intense usage means that consumers find very high value during a short window. This creates the opportunity to offer new content or functionality during “binge” usage. Adroit social game makers are masters at driving in-app purchases during a consumer’s greatest moment of engagement. For Quadrant IV, because the user will return again and again, there also exists the possibility to find new ways of increasing value, which includes offering add-on functionality or content for a fee.
For more data, the table below provides 30, 60 and 90-day retention rates as well as weekly frequency of use numbers. Note that some of the categories included in the table below are not included in the matrix chart above.
Compared to Flurry’s 2009 analysis, 90-day retention rates have increased from 25% to 35%. Additionally, frequency of use has decreased from 6.7 in 2009 to an average of 3.7 now. We attribute increased retention rates to increased quality in the market, driven by more competition. With tens of thousands of more companies building apps and hundreds of thousands of more available apps, the quality of apps has risen dramatically. Simply put, app makers are getting better at holding a consumer's attention longer. Additionally, we believe usage rates are lower because consumers have more choice than ever and are splitting their time across more applications. While Flurry included 19 categories in its 2009 report, we now include 30 distinct categories as the industry has matured and more distinct verticals have appeared.
Brave New World
With more than a billion smartphones and tablets now in use, as well as the eventual move of apps into the living room through connected TV efforts by the likes of Apple and Google, digital distribution is changing the way the world does business. No matter what category your app belongs to, understanding and improving user engagement is the new currency of doing business in the new digital world.
The rate of iOS and Android device adoption has surpassed that of any consumer technology in history. Compared to recent technologies, smart device adoption is being adopted 10X faster than that of the 80s PC revolution, 2X faster than that of 90s Internet Boom and 3X faster than that of recent social network adoption. Five years into the smart device growth curve, expansion of this new technology is rapidly expanding beyond early adopter markets such as such as North America and Western Europe, creating a true worldwide addressable market. Overall, Flurry estimates that there were over 640 million iOS and Android devices in use during the month of July 2012.
This report reveals which countries have the largest active smart device installed bases, are experiencing the fastest growth and are most penetrated. We also show how the distribution of app usage is shifting to become increasingly international. For this report, Flurry uses data from more than 200,000 applications that it tracks, running on more than 640 million devices worldwide. With its application coverage, Flurry estimates that it can reliably detect over 90% of all iOS and Android devices active in the world during a given month. Let’s start by looking at which countries make up the world’s largest app markets.
Compared to July 2011, the United States and China continue controlling the top two spots, with China dramatically closing the gap on the United States. Year-over-year, Flurry calculates that net active devices in the U.S. grew by approximately 30 million, while China saw more than 100 million new active devices enter the market. At this rate, China’s active installed base could overtake the United States as early as the 2012 Holiday season. Please note that Flurry detects actual active devices upon which apps are running, and that these numbers will differ than reported hardware sales by OEMs. Compared to last year, 9 of the top 10 countries remain unchanged, excepting Brazil, which pushes Australia just out of the top 10, into the 11th position.
The chart above shows the growth in active devices per country between July 2011 and July 2012. China leads the world with an astounding 401% year-over-year growth, demonstrating the power of the country’s vast population coupled with its rapidly growing middle class. Notably, all four BRIC countries (Brazil, Russia, India and China) are represented in the top 10-ten growth countries for smart devices, reinforcing their new stage of advanced economic development. For this chart, Flurry selected countries that had a minimum of a half a million active devices as of July 2011.
In addition to the fastest growing countries, Flurry also measured which markets are mostly rapidly nearing saturation. Specifically, we compared the number of active devices in each country relative to its adult population, between ages 15 and 64 years old. While Singapore, Hong Kong and Sweden form the top three countries in terms of smart device penetration, indicating their strong consumer technology economies, each country has a relatively small total population, ranging between 5 to 10 million. By comparison, the United States, the fifth most penetrated country with 78% of its adult population using smart devices, has a total population of more than 310 million. South Korea and the United Kingdom have the 2nd and 3rd largest populations among the top 10 penetrated markets, with roughly 50 million and 60 million respectively.
Finally, we look at look at the volume of application usage across the globe tracked by Flurry, which we estimate comprise of approximately one fifth of all worldwide app sessions on iOS and Android, the world’s largest cross-platform sample. Year-over-year app sessions in the U.S. declined as a proportion of WW sessions between July 2011 and July 2012, from roughly one-half to a little over one-third. The balance of the top 10 (ranks 2 -9) grew from 27% in July 2011 to 36% in July 2012. The rest of the world also made gains from 21% in 2011 to 28% in 2012. In total, 64% of all app sessions now take place outside the U.S.
Enabled by digital distribution across the unprecedented growing base of iOS and Android smart devices, global software distribution has never been so frictionless. After building an application, a development team can distribute its app on Android instantaneously and, after review by Apple, can be in the App Store within roughly one week. With international growth accelerating, there has never been a better time, in the history of technology, to be a software developer.
This week, wedged between Apple’s WWDC and Google I/O is Microsoft’s Windows Phone Summit in San Francisco on Wednesday, June 20. Additionally, Microsoft is holding a last-minute press conference that “you don’t want to miss” tonight in Los Angeles. Barnes & Noble claims they are not part of the announcement, and others speculate that Xbox Live streaming will be part of the offering. Given the popularity of gaming on smartphones and tablets, and the strength of the Xbox platform, this would be a strong move for Microsoft. Because the development community is strongly made up of gaming studios, a move such as this could help galvanize the 3rd-party development community. Over the last couple of years, there has been an all-out war among Apple, Google, Microsoft, RIM and others to win the hearts and minds of developers. It appears that Microsoft is now making its move.
This report follows up on another released by Flurry earlier this month, showing that Apple continues to hold a strong lead over Google’s Android for developer support. Looking beyond the top two platforms supported by developers, Flurry evaluates the possibility for a 3rd legitimate platform provider to emerge at this stage of the game. At Flurry, we track developer support across the platforms that compete for their commitment. When companies create new projects in Flurry Analytics, they download platform-specific SDKs for their apps. Since resources are limited, choices developers make to support a specific platform signal confidence, as they invest their R&D budget where they expect the greatest return. Flurry Analytics has been adopted by more than 70,000 companies across more than 190,000 applications. Let’s start with a comparison of the Research in Motion (RIM) versus Microsoft.
Microsoft Blows by Beleaguered RIM
The chart above shows the percent of new project starts represented by Microsoft and RIM among all platforms Flurry supports (e.g., iOS, Android, BlackBerry, Windows Phone, etc.). A new project start in the Flurry system is when a developer sets up an application for analytics tracking prior to the launch of that app. Over the past 12 months, Project starts for Windows Phone have grown by more than 600%, now accounting for 6% of all new project starts in the Flurry system during June 2012. As a percent of new project starts, RIM has remained flat. Overall, on an absolute basis, total new project starts within Flurry have grown by approximately 50%.
Microsoft Sets Its Sights on Android
We next combine all new projects across the top 4 platforms within the Flurry system, comparing Q2 2011 versus Q2 2012.
The chart above compares the percent of new projects built by developers per platform within Flurry. For this snapshot, we compare Q2 2011 versus Q2 2012. Year-over-year, developer support has shifted, with Microsoft’s dent becoming more visible, now representing 4% during Q2 2012. iOS and Android share continue to oscillate mildly now clocking in 67% for iOS and 28% for Android. BlackBerry remains flat. What is important to note is that all four platforms are growing, just at different rates. Specifically, growth rates per platform for year-over-year growth are: iOS 66%, Android 82%, Windows Phone 521%, BlackBerry 13%. Viewing the relative growth rates show just how much Microsoft is gaining against the market.
Considering the first chart in this report, Microsoft growth has been accelerating within Q2. If we look at just Android and Microsoft in the month of June, for every Windows Phone new project started, 4 have been started for Android. Considering the much smaller Windows Phone installed based compared to Android, Microsoft is currently over-indexing. From Google’s point-of-view, this must elevate Microsoft from an “also-ran” to a potential competitive threat with the resources and know-how to kick-start momentum and mount a campaign to reel in the second place player.
Generally, Windows Phone could be gaining against the entire market as a result of developer frustration for Android fragmentation, concern for increasing competition on iOS and a lack of faith in BlackBerry. Whatever the reason, it’s clear that Microsoft still knows how to attract third party developer support. With its Nokia-partnership and high anticipation around today’s Microsoft Tablet announcement, Flurry expects Microsoft to make continued headway over the course of 2012.
This month, the world’s two largest mobile app platform providers, Apple and Google, enter what is arguably the most critical month of the year for each company, when each hosts their annual developer conference, the Apple Worldwide Developer Conference (WWDC) and Google I/O. While engaged in a multi-year platform war, their success largely depends on innovation provided for their platforms by the third party developer community. If the developer community embraces one platform over the other, developers will build the software that infinitely extends the value of the consumer experience, giving a platform a meaningful edge. The perceived availability of a large, steady stream of high quality apps is a key reason for consumers to initially choose an Android or iOS device, and then to remain loyal. Moreover, given that the mobile industry is among the leading sectors in the worldwide economy, the outcome of these two conferences can largely impact the fate of some of the most prolific, innovative forces in the world’s economy today. Combined, Apple and Google have a market cap of approximately three quarters of a trillion dollars.
This report compares developer support for iOS versus Android and explores the underlying factors that could explain varying levels of developer loyalty. We use the data set collected by Flurry Analytics, now powering consumer insights for more than 70,000 companies across more than 185,000 mobile apps. Each day, Flurry tracks more than 1.2 billion anonymous, aggregated end user sessions across more than 100 million unique devices. Each month, Flurry tracks over 36 billion end user sessions across more than a 500 million devices, a number that is more than 60% of Facebook’s monthly active user base.
Oh Captain, My Captain
At Flurry, we track developer support across the platforms that compete for their commitment. When companies create new projects in Flurry Analytics, they download platform-specific SDKs for their apps. Since resources are limited, choices developers make to support a specific platform signal confidence, as they invest their R&D budget where they expect the greatest return. Further, because developers set up analytics several weeks before shipping their final apps, Flurry has a glimpse into the bets developers are making ahead of the market.
The chart above shows that Apple continues to garner more support from developers. For every 10 apps that developers build, roughly 7 are for iOS. While Google made some gains in Q1 2012, edging up to over 30% for the first time in a year, we believe this is largely due to seasonality, as Apple traditionally experiences a spike in developer support leading up to the holiday season. Apple’s business has more observable seasonality.
The Apple 2-for-1 Proposition
Among the reasons iOS appears more attractive to developers is the dominance by Apple in the tablet category. Not only does Apple offer a large, homogenous smartphone base for which to build software, but also when developers build for smartphones, their apps run on Apple’s iPad tablets as well. That's like getting two platforms for the price of one. Apple offers the most compelling ‘build once, run anywhere’ value proposition in the market today, delivering maximum consumer reach to developers for minimal cost.
The pie chart above demonstrates just how much Apple dominates the tablet category. The Galaxy Tab and Amazon Kindle Fire hold very distant second and third places in terms of consumer usage. To build the chart, Flurry aggregated total worldwide user sessions across the first five months of the year, January through May.
Android Fragmentation Pain
Opposite to the efficiency Apple offers developers through their homogenous device base, Android fragmentation appears to be increasing, driving up complexity and cost for developers. Further, this fragmentation is concentrated primarily in just smartphones, as there is no serious Android tablet contender to the iPad. For Android, Flurry observes fragmentation along two significant vectors, devices and firmware. Let's look at device fragmentation first.
The chart above shows the number of consumer application sessions across the top 20 Android devices in May 2012. Four major OEMs – Samsung, Motorola, HTC and Amazon – have Android devices in the top 20. 17 of the top 20 hold a share of 6% or fewer, among the top 20, meaning that each additional device a developer supports will deliver only a small increase in distribution coverage. However, on Android, both devices and firmware contribute to fragmentation, so let’s look at firmware fragmentation next.
The above chart reveals that the majority of devices in the market run Gingerbread, which is only the third newest iteration of the Android OS. Honeycomb, more optimized for tablets, and Ice Cream Sandwich, which put a lot of effort into the user interface, have a combined 11% of penetration in the market. Froyo, which shipped before Honeycomb and Ice Cream Sandwich, alone has a higher share of firmware penetration than the two newer, more advance firmware versions combined. This means that the majority of consumers are running on an Android operating system that is three to four iterations old.
Running a comparison of revenue generated by top apps on both iOS and Android, Flurry calculates that the difference in revenue generated per active user is still 4 times greater on iOS than Android. For every $1.00 a developer earns on iOS, he can expect to earn about $0.24 on Android. These results mirror earlier findings from similar analysis Flurry conducted in Q4 of 2011 and Q1 of 2012.
At the end of the day, developers run businesses, and businesses seek out markets where revenue opportunities are highest and the cost of building and distributing is lowest. In short, Android delivers less gain and more pain than iOS, which we believe is the key reason 7 out of every 10 apps built in the new economy are for iOS instead of Android.
Over the next two weeks, the momentum of two of the world’s most innovative, influential and prolific technology companies will be impacted by the reaction of the development community to their conferences, Apple WWDC and Google I/O. And as developers watch Apple and Google, the world should watch developers.
The app revolution has changed the way software is distributed and used among consumers. With a perfect storm of digital distribution, free content and powerful touch screen devices, the success of mobile apps has disrupted industries from telecommunications and games to music and news. To date, no category of apps has been more successful than Games, directly disrupting the traditional gaming industry. Flurry recently wrote about the impact iOS and Android game popularity has had on Sony and Nintendo. And with low barriers to entry for armies of entrepreneurial developers, indie game developers continue to thrive on iOS and Android.
Something Disruptive This Way Comes
Consider for a moment Facebook’s speedy billion-dollar acquisition of Instagram, a service that succeeds by delivering Facebook’s core value proposition of photo sharing, but only on mobile. When one understands that consumers now spend more time in mobile apps than they do online, Instagram’s value begins to make sense. With over 500 million iOS and Android devices in the market, mobile apps are the new battleground for consumer engagement. If Facebook feels compelled to snap up Instagram in this way, perhaps this is an indication of how relevant social networking has become in mobile apps, or simply how relevant mobile has become overall. In this report, Flurry focuses on the rise of the Social Networking category in mobile apps. Let’s start by looking at where consumers spend their time by application category.
In the chart above, Flurry compares the time consumers spend across different application categories when using smartphones. Starting on the left, we look at the average number of minutes a consumer spent each day, over the course of Q1 2011, across different app categories. For this period, we calculated that consumers spent 25 minutes (37%) of their app-using time in Games. They additionally spent 15 minutes (22%) of their time in Social Networking apps. News and Entertainment were the next most popular categories, garnering an average of 11 (16%) and 10 (15%) minutes per day, respectively. All other categories combined made up the final 7 minutes (10%) of time. During Q1 2011, Flurry tracked approximately 30 billion application sessions worldwide.
On the right, we conduct the same analysis for Q1 2012. Compared to the same quarter in 2011, time spent per consumer each day increased from 68 to 77 minutes. Additionally, the distribution of time spent per category shifted. Games usage dropped by 4% down to 24 minutes per day, while Social Networking increased by 60% up to 24 minutes per day. Games and Social Networking categories each controlled 31% of consumers’ time. News, Entertainment and Other categories commanded 12 (15%), 10 (13%) and 7 (9%) minutes, respectively. Flurry tracked approximately 110 billion application sessions during Q1 2012.
The most significant trend is that, for the first time in the history of applications (Flurry began tracking application usage in 2008), another app category is rivaling Games. We take the rise in Social Networking apps as a signal of maturation for the platform. As game demand may be hitting its saturation point, consumers are also discovering other apps, namely Social Networking. The year-over-year growth in Social Networking has been staggering. Not only has time spent increased by 60%, but also within a growing amount of total time spent in smartphone apps among consumers, from 68 to 77 minutes, or a growth rate of 13%.
Money Pools Where Audiences Aggregate
Through its mobile app traffic acquisition network, Flurry AppCircle, the company can also see how apps with growing audiences earn revenue through advertising. When app developers amass larger audiences, among the chief ways to monetize their businesses is by showing ads to their consumers. In the chart below, we show revenue earned by publishers in the Flurry AppCircle ad network for each of the last three months. Flurry AppCircle reaches over 300 million unique devices per month, making it one of the industry’s largest ad networks by reach. The columns in the chart grow from month-to-month at the same proportion as AppCircle publisher revenue growth. From just February to April of this year, Flurry AppCircle publisher revenue has grown by 23%. Please note that we forecast the remaining few days of April for the chart below.
From inspection, ad revenue in apps is driven primarily by Games and Social Networking categories. In other words, audiences using these apps a combination of the largest and most receptive to ads. For February, March and April, Games apps earned 35%, 35% and 36% of total ad revenue in the AppCircle network. Over the same three months, Social Networking climbed from 24% in February to 25% in March, and then to 37% in April. This is the first time in Flurry’s history that any category has surpassed Games in ad revenue generated (Flurry launched AppCircle summer 2010).
SoLoMo Not So Loco?
Over the last couple of years, the term “SoLoMo” was coined to describe the convergence of social experiences on mobile devices that leverage some element of proximity (i.e., location) to the experience. While a Silicon Valley term in origin, it speaks to the new consumer experiences possible when dreaming up any combination of these three factors. Phones are powerful, connected and always with consumers. And they are considered personal devices that easily enable sharing of personal content and information through apps. Build a clever app that leverages these aspects in a compelling way, and you could have the next Pinterest or Instagram.
As business ventures, the ability for Social Networking apps to engage consumers in a meaningful way is driving a wave of investment and bullish valuations. Social networks like Pinterest, Path and Skout are raising major venture capital rounds. This month, Andreessen Horowitz invested $22 million into Skout, and Greylock and Redpoint helped plow $30 million into Path. Pinterest, which has a strong mobile component, has become the third most popular social network behind Facebook and Twitter, and ahead of LinkedIn, Tagged and Google+. With so much innovation, coupled with high engagement among consumers, this appears to be only the beginning.
Games Don’t “Like” Social Networking Apps
The rise of Social Networking apps also signals the end of the era of gaming dominance within mobile apps. While the free-to-play business model performs extremely well, enabled by in-app-purchases, it does so primarily for simulation games, a sub-genre of the total games category. As long as the total iOS and Android installed base grows, all categories will continue to grow naturally. However, as we reach saturation for mobile gaming on a per user basis (one consumer can play only so many free-to-play games), the Games category could start behaving more like a “zero sum game” from here on out, meaning that game companies would have to fight over a finite group of consumers in order to grow their businesses. For one app to grow, it would have to take from its competitors. Even with an influx of new consumers into the market, the expected would-be casual gamers will be increasingly wooed away from games by compelling Social Networking and other apps. Going forward, the Games category will have to look to innovate on mobile to maintain its dominance and growth.
A Note about Methodology
For the comparison of minutes spent in this blog post, it’s important to clarify that these figures exclude tablet usage, and focus on smartphones only. While Flurry calculates that consumers spend an average of 94 minutes per day using mobile apps, that figure is a reflection of total usage spread over both smartphones and tablets. When we isolate just smartphone usage, as we’ve done in this analysis, the number of minutes spent on apps is lower.
The economic boom created by Apple and Google through their iOS and Android platforms has precipitated a renaissance among entrepreneurial developers. With some of the lowest barriers to entry in the history of software development and distribution, apps are getting built and downloaded at breakneck speeds. Earlier this month, Apple crossed a record 25 billion downloads from more than 550,000 available apps. Google announced in December 2011 that it had crossed 10 billion downloads from 400,000 available apps.
As markets mature, rational economic behavior emerges. Even the most passionate, idealistic software start-ups focus increasingly on markets where revenue generation is highest. In this report, Flurry compares the ability for app developers to generate revenue per user across the major app stores. We examine a basket of top-ranked apps that have similar presence across iOS, Amazon and Android. Their primary business models are in-app purchase, which is the revenue type we compare for this analysis. Additionally, earlier research by Flurry found that the in-app purchase revenue model generates the majority of revenue for apps. Combined, these apps average 11 million daily active users (DAUs). We measured their revenue per user over a 45-day period, from mid-January through the end of February 2012.
The chart above compares revenue generated per user across iOS, Amazon and Android app stores. We start by taking the revenue generated per user in the iTunes App Store and setting it to 100%. We then compare the relative revenue generated per active user from Amazon and Google to the amount of revenue per active user generated by the iTunes App Store. Doing so, we find that Amazon Appstore revenue per active user is 89% of iTunes App Store revenue, and Google Play revenue per active is 23% of iTunes App Store revenue. Another way to interpret the results is that, for the same number of users per platform, every $1.00 generated in the iTunes App Store, will also fetch $0.89 in the Amazon Appstore and $0.23 in Google Play. These results mirror those of a similar analysis conducted by Flurry last December, where we found for every $1.00 generated per user in the iTunes App Store, developers generated $0.24 per user in the Android Market.
Amazon's bet to fork Android in order to put consumers into their own shopping experience on Kindle Fire appears to be paying off. Showing its commerce strength, Amazon already delivers more than three times the revenue per user in its app store compared to what Google generates for developers.
For some possible insight, let's consider the DNA of each company. Apple runs the highest revenue-per-square foot generating retail store on the planet as well as the successful iTunes store. Amazon, who invented the one-click purchase, perfected online shopping with data, efficiency and customer service. Google’s strength is in scalable online search engine and advertising technology. Running a store, retail or digital, has not been Google's traditional core competency.
As developers make decisions to support different platforms, the ability to generate revenue per user will always be a key factor. Based on revenue potential, we expect to see an increasing number of developers support Amazon. We also believe that companies such as Samsung, the leading Android-supporting OEM, could also consider emulating Amazon’s move to fork Android. Google, who recently saw the departure of Eric Chu, the most public-facing proponent of Android Market improvement, will need to reduce commerce friction to maintain strong developer support. From an ecoystem perspective, the emergence of Amazon as an additional distribution channel appears to be a boon for developers.
[UPDATE: For clarity, I went back through this post and specified, where appropriate, including in the title of the chart, that the revenue comparison in this analysis was per user, not total revenue generated. Peter]
The era of mobile computing, catalyzed by Apple and Google, is driving among the largest shifts in consumer behavior over the last forty years. Impressively, its rate of adoption is outpacing both the PC revolution of the 1980s and the Internet Boom of the 1990s. Since 2007, more than 500 million iOS and Android smartphones and tablets have been activated. By the end of 2012, Flurry estimates that the cumulative number of iOS and Android devices activated will surge past 1 billion. According to IDC, over 800 million PCs were sold between 1981 and 2000, making the rate of iOS and Android smart device adoption more than four times faster than that of personal computers.
Powerfully, smartphones and tablets come with broadband connectivity out-of-the-box, instantly combining the best of “Silicon” and “The Cloud” for consumers. The Internet, which served to connect the installed base of PCs, grew to 495 million users by the end of 2001, according to the International Telecommunication Union. With the Internet beginning its commercial ramp in 1996, iOS and Android devices will see double the number of device activations during its first five years compared to the number of Internet users reached during its first five years (Internet 1996 – 2001 vs. Smart devices 2007 – 2012).
On top of this massively growing iOS and Android device installed base, roughly 40 billion applications have already been downloaded from the App Store and Android Market. More than ever, consumers are splitting their time accessing services on the Internet from PCs versus doing so on mobile devices from apps. Last summer, Flurry published a report detailing how the average smartphone user, for the first time ever, began spending more time in their mobile applications than they do browsing the web. Updating the analysis, Flurry finds the usage gap continues to widen. Let’s look at the updated numbers.
The chart compares how daily interactive consumption has changed over the last 18 months between the web (both desktop and mobile web) and mobile native apps. For the web, shown in green, we built a model using publicly available data from comScore and Alexa. For mobile application usage, shown in blue, we used Flurry Analytics data, which tracks anonymous sessions across more than 140,000 applications. We estimate this accounts for approximately one third of all mobile application activity, which we scaled-up accordingly for this analysis.
Since conducting our first analysis in June 2011, time spent in mobile applications has grown. Smartphone and tablet users now spend over an hour and half of their day using applications. Meanwhile, average time spent on the web has shrunk, from 74 minutes to 72 minutes. Users seem to be substituting websites for applications, which may be more convenient to access throughout the day.
Our analysis shows that people are now spending less time on the traditional web than they did during the summer 2011. This drop appears to be driven largely by a decrease in time spent on Facebook from the traditional web. In June 2011, the average Facebook user spent over 33 minutes on average per day on the website. Now, that number is below 24 minutes. Time spent on the web without Facebook has grown at a modest rate of 2% between June 2011 and December 2011.
The analysis also shows that people are spending ever more time in applications. In fact, time spent in apps and the web, combined, has grown as users lead a more connected life. This growth though has been driven entirely by applications. The growth in time spent in mobile applications is slowing – from above 23% between December 2010 and June 2011 this year to a little over 15% from June 2011 to December 2011. The growth is predominately being driven by an increase in the number of sessions, as opposed to longer session lengths. Consumers are using their apps more frequently.
Facebook Pushes into Mobile Apps
Based on our analysis, we believe that Facebook users, and users of other traditional style websites, are increasingly accessing services through mobile applications than from desktops. Nielsen recently reported that Facebook is the most used app on Android among 14 – 44 year olds, surpassing usage of Google’s own native, pre-installed apps. Additionally, Facebook Messenger became the top downloaded app, at least one time during 2011, across more than 100 different App Store countries. In the U.S., the largest App Store market, Facebook Messenger ranked as the top overall app across most of the holiday week, during which more downloads occur compared to any other week.
With Facebook’s recent push into HTML5 with Project Spartan, where apps built for Facebook’s platform can run on top of the Facebook app, instead of requiring the user to launch the iOS app equivalent, this poses a disintermediation challenge to Apple. As Apple and Google continue to battle for consumers through the operating system and devices, Facebook is demonstrating that it can leverage its hold over consumers at the software level, through the power of the social network, across multiple platforms.
Facebook and Google are already locked in a battle for the online consumer, with Facebook having steadily taken share from the search engine giant over the last several years. Recently, as Google countered with its socially-oriented Google Plus, Circles and Hangouts services, Facebook added features such as news feeds to further lock in consumers to its service by obviating the need to discover content through search.
Likewise, Apple’s recently launched iCloud service, which allows consumers to store their most personal content, including music, photos and contacts, as well as its deep integration with social-service, Twitter, appears to buttress against Facebook’s ability to control the consumer relationship. With games as the top app category across Facebook, iOS and Android, as well as having become increasingly social in nature, Facebook is countering to reclaim valuable game play sessions it earned from its own platform play launched in 2007, rather than simply surrendering them to iOS and Android, who have effectively wooed consumers off of the web platform to mobile apps.
Games & Social Networking Dominate Mobile App Usage
With mobile app usage soaring, Flurry additionally studied which categories most occupy consumers’ time. The results are shown in the pie chart below.
The chart clearly shows that Games and Social Networking categories capture the significant majority of consumers’ time. Consumers spend nearly half their time using Games, and a third in Social Networking apps. Further considering that Flurry does not track Facebook usage, the Social Networking category is actually larger. Combined, from just what Flurry can see, these two categories control a whopping 79% of consumers’ total app time. This breakdown in usage reveals Facebook’s inherent popularity as the leading social network, as well as how important controlling the game category is for all platform providers. As we drill down into the category data, consumers use these two categories more frequently, and for longer average session lengths, compared to other categories.
Any way we slice it, Games and Social Networking apps deliver the most engaging experience on the web and mobile today, and set the stage for the battleground for controlling the consumer relationship going forward for all platform providers on all platforms.