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.
Just days into the Chinese New Year (Year of the “Snake” for anyone keeping track), China has passed the U.S. to become the world’s top country for active Android and iOS smartphones and tablets. This historic milestone takes place a year after Flurry first reported that China had become the world’s fastest growing smart device market. Since then, it took China’s rapidly growing middle class just twelve months to close the gap on the U.S.
For this report, Flurry uses its entire data set, tracking more than 2.4 billion anonymous, aggregated application sessions per day across more than 275,000 applications around the world. Flurry estimates that it reliably measures activity across more than 90% of the world’s smart devices.
Reviewing the chart shows that China and the U.S. had roughly the same active smart device installed base in January 2013, 222 million in the U.S. versus 221 million in China. We use a model to project the final February 2013 installed base for each country based on historical growth trends as well as the number detected devices per country through the first half of February. Flurry estimates that by the end of February 2013, China will have 246 million devices compared to 230 million in the U.S.
We also conclude that the U.S. will not take back the lead from China, given the vast difference in population per country. China has over 1.3 billion people while the U.S. has just over 310 million. Considering that the U.S. has the world's 3rd largest population, the only other country that could feasibly overtake China sometime in the future is India, with a population of just over 1.2 billion. However, with only 19 million active smart devices in India, China will not likely see competition from India for many years. Below, we show the top 12 countries by active iOS and Android installed base through the end of January 2013.
The chart shows that the U.S. and China each have more than five times the active installed base than that of the U.K., the world’s third largest market. Additionally, both China and the U.S. continue to see rapid device adoption. Year-over-year, compared to January 2012, the U.S. added 55 million new devices. However, in that same time, China added a staggering 150 million new devices. With its growth rate, China would have passed the U.S. earlier, except for the U.S.’s massive holiday season, which enabled the U.S. to hold off China for an additional two months.
The final chart in our analysis shows growth in the number of active smart devices per country, between January 2012 and January 2013. While China no longer leads the world in growth, it still commanded an impressive 209% rate of growth on top of a base of 71 million devices from January 2012. For this chart, Flurry selected countries that had a minimum of half a million devices as of January 2012. Countries that grew faster than China over the last year were Colombia, Vietnam, Turkey, Ukraine and Egypt. While the four BRIC countries are not all among the top 12 countries in terms of percentage growth (specifically, Brazil and Russia are not top 12 "growers"), all four are among the top 12 when calculating the number of net active devices added per market (i.e., Brazil +11.5 million, Russia +12.0 million, India +12.4 million, China +149.5 million).
In this new era of mobile computing, sparked by a confluence of powerful innovation across microprocessors, cloud storage and network speeds, Apple and Google have helped create the fastest adopted technology revolution in history, 10X faster than that of the PC Revolution and 3X that of the Internet Boom. And now, as the largest and fastest modernizing country in the world, Chinese consumers lead that revolution.
The Super Bowl is one of the world’s top media events. This year’s contest, Super Bowl XLVII, was hosted in New Orleans and drew an average of 108.4 million viewers, the third largest audience in U.S. television history. According to Nielsen, previous Super Bowls captured the top two U.S. TV audiences, with last year’s event drawing 111.3 million viewers and the previous year’s attracting 110.0 million.
While the contest on the field pitted the San Francisco 49ers against the Baltimore Ravens, an equally fierce battle for consumer engagement was waged across multiple screens. As the world’s top brands paid up to $4 million to air 30 second television spots, consumers were more distracted than ever, accessing mobile apps and social media in droves. Twitter reported 24.1 million Super Bowl-related tweets, the most popular of which focused on Beyoncé, Destiny’s Child, the Superdome power outage and key game moments. Facebook reported similar increases in conversations around these topics.
Mobile Apps Make TV the Second Screen
In this report, Flurry finds that mobile appears to have become the first screen. The implication is that, from this day forward, as marketers advertise on television, they must ensure that the content is sufficiently compelling to pull the consumer away from her smartphone or tablet. While TV may continue to be widely regarded as the first screen, Flurry believes that brands need to reverse that logic in order to reach and engage their consumers.
For this study, Flurry measured U.S. app session starts, per second, over the course of this year’s Super Bowl, last year’s Super Bowl, and the equivalent time period on the Sunday before this year’s Super Bowl (to establish a baseline for an average Sunday) from 3 PM PST to 8 PM PST. Flurry Analytics is used by 275,000 apps, including many of the most-used apps, with aggregate daily usage sessions of 2.4 billion.
For this analysis, we estimated U.S. app session starts occurring on Super Bowl Sunday by sampling from our own data and extrapolating based on the proportion of the market that Flurry "sees." To be able to compare across last year's to this year's Super Bowl, we created an index where “100” represents a baseline for app usage. Let’s start by looking at how this year’s Super Bowl app activity compared to that of last year’s.
The chart above shows this year’s Super Bowl in blue compared to last year’s Super Bowl in grey. The spark lines show application session starts in the U.S. sampled from Flurry’s system, per second. The way to interpret the chart is that if the line is moving up, consumers are picking up their phones (or tablets). And if the line is moving down, consumers are putting down their phones (or tablets). In other words, when something on the TV cannot sufficiently hold the consumer’s attention, she often reaches for her connected device. The advantage for using mobile app usage as a signal is that we can accurately measure when consumers are interacting with the mobile apps. In this way, we can distinguish between active (consumer is using the "app") and passive use (app is just "on"). Using mobile app usage as a signal, the events to which consumers paid the most attention were the National Anthems, Halftime shows and close finishes.
A few structural differences to the length, shape and height of the curves are worth noting. First, last year’s Super Bowl was faster up through the first half, as we see that Madonna’s half time show started earlier compared to Beyoncé’s. Additionally, this year’s Super Bowl was further extended due to the 34-minute power outage in the Superdome just after the beginning of the 3rd quarter. Relative to last year’s Super Bowl, consumers began picking up their phones and tablets en masse during this period. Next, this year’s Super Bowl curve (blue) sits higher than last year’s curve (grey), which indicates that there was more relative app usage in the U.S. this year versus last year. Specifically, we measure a 19% increase in app usage between last year’s Super Bowl versus this year’s.
The chart above plots app usage during this year’s Super Bowl against the same time period from the Sunday before. This gives us a sense for how much application usage varies on a normal Sunday compared to Super Bowl Sunday. Overall, total app usage dropped in aggregate by only 5% from the Sunday before to Super Bowl Sunday, which suggests that the Super Bowl largely failed to curb consumer app usage when compared to normal behavior. The height and the shapes of the curves are very similar. More notable differences did appear from just before the Super Bowl started up until about half way into the second quarter of the game, where consumers appeared to be paying more attention to the Super Bowl (i.e., the blue line was modestly below the grey line for that period). We also note a spike in app usage during the Jeep halftime report during the sports analyst commentary, followed by a plummet in activity during Beyoncé’s performance. Next, during the outage, consumers began using their apps. After gameplay resumed, app usage was very similar to a normal Sunday except for the last minutes of this year’s close Super Bowl finish, as the 49ers mounted an exciting, narrowly-missed comeback.
Next we studied how app usage varied during different times during the Super Bowl: while the game was on, when ads were broadcasted, during halftime and during the power outage. We used app activity during the game as a baseline.
The overall finding was that app usage did not vary greatly between commercials and game play, with only a slight increase in app session starts during ads in this Super Bowl, and an even smaller decline in session starts during the last Super Bowl. In contrast, session starts dropped by nearly ten percent during this year’s halftime. That suggests that while Beyoncé was compelling enough to cause viewers to put down their phones, much of the game and many of the ads were not. The large increase in app session starts during the power outage provides additional evidence that TV cannot hold attention without compelling content. Consumers turned to their smaller screens in great numbers as soon as there was a lull in the action on TV.
Of course, there is variation within these averages. Groups particularly prone to starting app sessions during ads include: Photo & Video Enthusiasts, Real Estate followers, Small Business Owners, TV Lovers and Movie Lovers. For your convenience, you can find Flurry (psychographic) Personas listed here. Consumers less inclined to start app sessions during ads include iPad Users, Food Enthusiasts, Catalog Shoppers, Fashionistas and Home & Garden Enthusiasts. Those most inclined to take a break from their apps and watch the halftime show included Home & Garden Pros, Health & Fitness Enthusiasts, Fashionistas, Catalog Shoppers and Food Enthusiasts. Groups whose app use climbed most during the power outage – suggesting that they were paying closest attention to the game at other times – were Males, Seniors and Sports Fans.
Mobile Is Killing The TV Star
Ratings from Nielsen confirm that people continue to sit in front of TVs on Super Bowl Sunday. However, the fact that overall app usage declined by less than just 5% compared to same time period on the prior Sunday suggests that a large amount of consumers’ attention is spent in apps, even as they sit in front of the TV. This should cause advertisers to question the value of paying a premium for Super Bowl ads when the attention premium they command is eroding. That’s particularly true for some groups. For example, overall app usage by Moms, during the time the Super Bowl was on, dropped by less than two percent compared to the previous week. While Tide’s “Miracle Stain” ad was certainly entertaining, it appears that the “Mom” target market was not paying attention.
The price of a Super Bowl ad pays for a lot on mobile whether that’s in app advertising, sponsored content, in-app product placement or branded apps, and Flurry believes many marketers may benefit from reconsidering their media mixes in light of evidence in this report showing that unless exceptionally interesting things are happening on TV, a significant and increasing amount of consumer attention is spent using smartphones and tablets.
New Consumer Behavior. New Strategy.
Brands who continue to believe in the potential of TV during major events such as the Super Bowl must also now understand the multi-screening behavior of their target market, and take that into account in developing their campaigns. For example, marketers targeting Fashionistas would be well-served by scheduling ads to run during or near the half-time show, while running in-app ads during the game itself. The reverse strategy would apply to groups such as Sports Enthusiasts. These results also have implications for those who wish to run integrated campaigns across screens: those will only be effective if the TV portion is compelling enough to pull attention away from the screens in the hands of the audience.
With the holy grail of TV events disrupted, advertisers need to take note. The winner of the Screen Bowl is the smartphone. Mobile is here. Mobile is the new first screen.
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.
With the frenzy created by the speed and price for which Facebook bought Instagram, app entrepreneurs and investors are excitedly looking for where consumers will next flock within mobile apps. In a recent report, Flurry quantified the dramatic increase in usage among social networking apps on smartphones. For the first time since the App Store launched in summer 2008, the Games category found itself rivaled by another category in terms of time spent in apps. The rise in popularity of apps like Instagram, Path and Skout signals a new era of content consumption on mobile phones where consumers are finding new, compelling ways to spend their time beyond just games.
This report reveals emerging trends in mobile app category usage. By studying how consumer time is shifting across app categories, we provide an early, clear demand signal. In other words, we see where consumers are spending an increasing amount of time in apps beyond Games and Social Networking to show what’s next in mobile app popularity. For this study, Flurry leverages a sample of 8 million active mobile app users across all app categories. Flurry Analytics tracks more than 180,000 applications for more than 67,000 companies across iOS, Android, HTML5, Windows Phone and BlackBerry. The chart below shows the fastest growing app categories based on where consumers are spending their time.
The above chart shows the top five app categories based on growth in minutes spent from October 2011 to March 2012. Starting on the left, the Photo & Video category has grown the most, by 89%, in minutes spent per active user. Music, Productivity, Social Networking and Entertainment round out the top five with growth of 72%, 66%, 54% and 40%, respectively. These categories represent the fastest growing categories in mobile apps over the last 6 months. When considering what’s hot beyond the gaming category on mobile, this gives us a strong indication. Beyond the topical Instagram success story, chances are that future hits are among these categories. Some apps with momentum today include Path, Skout, Viddy, SocialCam, Evernote, Spotify and more. Please note that for iOS and Android, Flurry looks at equivalent categories (e.g., Photos & Videos in the iTunes App Store vs. Media & Video on Google Play). For all charts we use iOS category names.
Trendspotting: The Instagram of Video
We next drill down into the Photo & Video app category to better understand growth in this category. Expanding the time range in this chart, we show the number of minutes spent by active user per month from July 2011 through March 2012.
The “overnight” sensation of video sharing apps like Viddy and SocialCam has actually been more like a 9-month tsunami gaining power. Looking at growth from July 2011 to March 2012, time spent in Photo & Video has grown by 166%. Video sharing apps offer a compelling benefit to consumers, allowing them to conveniently capture, edit and share videos on-the-fly using the powerful mobile computing devices in their pockets. Trained by the sharing behavior of Facebook, and enabled by a confluence of underlying technology like built-in HD video cameras, hardy on-device processors, increased network bandwidth, cloud storage and user-friendly applications like Viddy and SocialCam, social video apps are taking off. It’s a meaningful example of the unique innovation possibilities afforded by mobile apps.
Cool Kids with Pumped Up Kicks tell YouTube: “You Better Run Faster than My Bullet”
Back in 2006, Google acquired the buzzy YouTube for $1.65 billion after its own Google Video service could not keep pace. Now it appears new “cool kids” in the form of Viddy and SocialCam threaten to disintermediate the web juggernaut’s acquisition. In a recent Forbes article, Eric Jackson laid out a hypothesis that the new breed of social companies, typified by Instagram, view mobile as their primary, often exclusive platform. “They don’t even think of launching via a web site. They assume, over time, people will use their mobile applications almost entirely instead of websites.” He concludes that “we will never have Web 3.0, because the Web’s dead.” Just consider that it’s now possible to capture, edit, share and view engaging, meaningful videos among friends, all from your phone, without ever touching a computer. In this perspective, a threat to YouTube begins to feels real.
To generate a comparison between mobile app and Internet video consumption, Flurry combined its data set with publicly available comScore Video Metrix data. In the chart above, we show the number of minutes consumers spend per month using smartphone video apps versus Google Sites on the Internet (primarily YouTube). Over the course of 2011, minutes spent viewing video content online grew from 276 minutes to 472 minutes, or 71%. Over the same time period, video apps grew from 63 minutes to 152 minutes, or 141%. While mobile app video consumption grew more than online consumption, the gap in usage at the end of 2011 was still meaningful. During 2012, however, is where things get interesting. As online video consumption dropped by 10%, mobile app video consumption increased by another 52%. By then end of March, consumers were spending 54% of amount of time in mobile video apps compared to Google Sites online, 231 minutes in apps versus 425 minutes online.
While it cannot be concluded that mobile video apps are cannibalizing YouTube, the shift in time spent between these two platforms appears to be a signal of disruption. Think of it this way: With every mobile video you share of friends, family, vacations, parties and weddings, you are likely loading another bullet in the chamber for Web 3.0. For YouTube, it appears they need to run, outrun your gun.
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.
Flurry recently quantified China’s meteoric adoption of iOS and Android applications. While China ranked 10th in application sessions at the beginning of 2011, it finished the year in 2nd place, only behind the United States. With its large population and rapidly emerging middle class, adoption of apps vaulted China into the position of world’s 2nd largest app economy. In additional analysis, Flurry also determined that China has the most market upside, based on calculating those in China who can afford smartphones versus the current installed base.
This report reveals that, for the first time ever, China now leads in new smart device adoption (iOS and Android smartphones and tablets). We also update app usage velocity trends for China and the rest of the world, since first studying this late last year. For this report, Flurry used its entire data set, tracking more than 1 billion anonymous, aggregated application sessions per day. More than 60,000 companies use Flurry Analytics across more than 160,000 applications.
China's Growth Spurt
Let’s start with a look at the fastest growing countries, as measured by app session growth.
Comparing Q1 of 2011 versus Q1 2012, the chart above shows the ten fastest growing countries in terms of app sessions. A session is the launch and use of an application. For example, a consumer who opens a news application and then spends two minutes reading various articles counts as one session. Starting on the left, China leads the world in app session growth, with an enormous growth rate of more than 1100% between Q1 2011 and Q1 2012. China’s growth rate is particularly staggering given that it was already the world’s 7th largest country in terms of app sessions by the end of Q1 2011. This speaks to the country’s sheer population as well as increasing affluence among a meaningful part of its population. Please note that we project the last ten days of Q1 2012.
Building an App? Go East, Young Man!
We next study new device activations between China and the U.S., with amazing results.
The above chart shows new iOS and Android device activations per month in the U.S. and China for the last 15 months, from January 2011 through March 2012. In January 2011, the U.S. accounted for 28% of the world’s total iOS and Android device activations, while China accounted for 8%. In February, Flurry calculated that China surpassed the United States in monthly new iOS and Android device activations for the first time in history. China is now the world’s fastest growing smart device market. For March, we project that China will account for 24% of all iOS and Android device activations, while the U.S. will account for 21%. Again, please note that we project the several days of March to round out Q1 2012.
With China now activating more devices per month than the U.S., this means that the gap is closing between the two countries in terms of installed base. Not only is China already the second largest app economy, but also could eventually overtake the U.S. as the country with the largest installed base of smart device users. We estimate that the U.S., a more mature market, currently has more than twice as many active devices than China. However, China, a faster growing, emerging market, already has twice as large an installed base as the next largest market, the UK.
Apps Without Borders
In this last chart, Flurry looks at the shift in application usage across the world.
The chart above compares mobile app sessions tracked by Flurry Analytics in Q1 2011 versus Q1 2012. The green area shows the percent of app sessions occurring in the United States, the leading mobile app market. While the absolute number of sessions in the U.S. has more than doubled between Q1 2011 and Q1 2012, its share of total sessions has declined from 56% to 46%. In other words, while the U.S. app market is growing rapidly, the rest of the world is growing even faster. Looking at the balance of the top 10 countries (ranks 2 – 10: China, UK, South Korea, France, Australia, Canada, Japan, Germany and Spain), this group has increased in collective sessions by 3.4 times between Q1 2011 and Q1 2012, resulting in an increase in total session-share from 27% to 30%. Further, the rest of the world (another 217 countries across which Flurry tracks user sessions), has grown by more than 4 times, increasing in session-share from 17% to 24%.
No matter how we slice it, the application market continues to grow at unprecedented rates, and increasingly across more borders. With smart devices adoption rates more than four times greater than those witnessed during the 1980s PC revolution and twice as great as those seen during the 1990s Internet Boom, no other consumer technology has been more accessible than smart device application software. It’s literally taking over the world.
Smartphones app usage, facilitated by explosive iOS and Android device adoption, has created among the fastest-growing media channels in the history of consumer technology. Flurry estimates that, worldwide, over 600 thousand apps are available for over 350 million iOS and Android devices. On average, consumers have downloaded over 65 apps per device.
While micro-transaction models, largely associated with free-to-play games, have proven the most lucrative business model for iOS and Android apps, there have been big bets placed on advertising. In addition to its own iAd initiative, Apple acquired Quattro, a mobile ad network, for $275 million in January 2010. This was shortly after Google announced its intention to acquire Admob, a rival ad network, for $750 million in November 2009.
In June 2011, Gartner projected that mobile advertising revenue would double to $3.3 billion worldwide in 2011, and grow from around $300 million to over $700 million in 2010 in North America. eMarketer, a research firm, predicts that U.S. mobile ad spending will top $1.1 billion this year.
In this report, Flurry focuses on the size and growth of available advertising inventory within iOS and Android applications. We used data from over 100,000 applications tracked by Flurry to estimate the size of this media channel. The chart below shows that U.S. app inventory is not only growing at a staggering rate, but also poised to absorb the equivalent of the entire U.S. Internet display advertising spend by the end of this year.
Reviewing the chart, we see that U.S. mobile app inventory has grown aggressively over the last year. With its growth trajectory, it will be able to absorb the entire U.S. online display ad spend by the end of the year. Another way to look at this is that, in approximately two years, mobile app inventory is growing so aggressively that it could easily meet the demand of a mature, 15-year-old form of online advertising.
To arrive at these figures, we first tracked the average number of ads shown per application session, which we found to be 4.3. The average application session is 4.2 minutes. For reference, the average session length of a website is just under 1 minute. We then looked at the number of sessions. Flurry tracks about 20% of all sessions in the market, and so we grew our numbers accordingly to come up with a market size.
We compared this inventory with the net spend on display advertising in the US. The US market currently spends a little over $12bn per annum on online display advertising. We assumed a conservative CPM (cost per 1000 impressions) of $2.50 for mobile application inventory. As a point of reference, a typical 30 second video on a large video streaming website such as Hulu has a CPM of $10-$15.
We at Flurry see four reasons why the market is growing at such a fast rate:
1) Smartphone growth – over a million smartphone devices are currently being activated on a daily basis
2) Publisher growth – The App store now has over 400,000 apps in the market and Android, with over 200,000, is catching up quickly
3) Session use growth - Flurry has previously found that smartphone users now spend more time in mobile apps per day than the average Internet users spends online.
4) Publisher integration of ads – with larger screens, targeting, and increased adoption of mobile applications, more publishers are integrating ads into their apps
Not only is inventory growing, but Flurry has also found that the average user of a smartphone is a very attractive target for advertisers. With a sample of more than 60,000 app users, we used location data and zip code statistics available from the U.S. Census Bureau to understand their demographics. On average, smartphone users are better educated and earn higher household incomes than the average of the U.S. population.
Additionally, looking at age and gender, we find that U.S. smartphone app users cluster into younger age groups and trend slightly more female.
In 1994, Hotwired.com was the first company to start selling display advertising in large quantities on the Internet. Back then, it took over six years for advertisers to embrace this model. For mobile apps, less than four years into their growth cycle, a critical mass of highly attractive consumers has been achieved. With growing awareness by brands and advertising agencies, we now expect digital advertising on mobile to take off in earnest.