App Annie forecasts consumer spending on all mobile app stores will reach $110B+ in 2018, up 30% YoY, driven by games and in-app subscriptions
Context & Ripple Effects
App Annie's year-end forecast extends a run of estimates it has been publishing all year: its Q1 2018 report already showed spending up 22% YoY to $18.4B, and its Q2 report showed 20% growth to $18.5B — so the $110B+ full-year call is an extrapolation of momentum it has been tracking quarter by quarter, not a fresh thesis.
It also lands in a market where forecasters now compete: Sensor Tower's rival projection put combined App Store and Google Play spending at $74B in 2018 growing to $156B by 2023, meaning App Annie's number doubles as a positioning statement in the app-intelligence business.
First-order effects
- Developers running games and subscription apps — the two drivers App Annie names — enter 2018 with a market growing 30% YoY, which raises the value of retention mechanics over download volume.
- Apple and Google's store commissions scale directly with that $110B+ pool, so every point of subscription-driven growth compounds their services revenue without either company shipping anything new.
Second-order effects
- Sensor Tower's entry into forecasting forces buyers of app-market data to choose between methodologies, since its 2018 baseline ($47B App Store, $27B Google Play) implies a slower-growth world than App Annie's headline.
- As subscriptions become the dominant spend category, user-acquisition economics tilt toward apps with recurring billing, pressuring ad-funded and one-time-purchase apps to add subscription tiers to stay competitive for placement and spend share.
Third-order effects
- If the pattern holds — App Annie tracked $120B spent in 2019 and $112B in 2020, with iOS capturing roughly two-thirds of every dollar — the structural story is app stores maturing into recurring-revenue platforms where a minority of subscription and game titles absorb most consumer money.
- That concentration sets up the longer-running fight over store commissions and alternative payment paths, because whoever owns the billing relationship on a $100B+ annual pool controls the industry's largest toll booth.
The trend: Mobile app-store economics are shifting from pay-per-download to recurring in-app subscriptions, concentrating consumer spend in games and services and enlarging the platform owners' commission base.