China Engulfs the US- the Leading Country Lost its No.1 Position in the Revenue of the App Store

The United States is no longer the biggest driving force of revenue for the App store. About $1.7 billion in the iOS app store revenue was achieved in China. This revenue started to increase in the third quarter of 2016. The majority of the revenue was associated with the games. But the video streaming and entertainment applications are also equally becoming increasingly popular.  As there is an increase in revenue in the China’s app store, the US lost its first position for the first time since 2010.Earlier, App Annie predicted that China would depose the US as the largest market for the iOS apps by the end of the year 2016. Actually, that was the condition at last.

China now became the leading market for the iOS apps and it overtakes the US by 15%. The Chinese users started to spend five times more on the Apple’s App store than the time they spent four years ago. And this trend is expected to continue in the future.

App Annie predicted that China will have the largest revenue growth in the world by 2020. It may lead many leading countries in the next few years. Games will be the important factor for this.

About 75% of the revenue came from the games in the third quarter of 2016. The revenue from the non-gaming platforms may increase in the future as the customer’s approach towards it improves and matures. The non-gaming platforms have started to reach the people and they have entered into the daily routines of the people across the globe.

In the last quarter of 2016, games are the primary factor for the increase in revenue. The app subscriptions also have the significant growth in the App Store.

Next to the games, entertainment apps play the major role in the growth of revenue. For this category, the revenue rose by 3.5 times than the previous years. The video streaming apps such as Tencent Video, iQIYI, and Youku also plays the important role in the growth of the App store revenue.

Netflix, the global leader has all the things what are needed, but it ended up trying. Video streaming is also entering into the paths of the social networking apps. Social networks have a strong position in China. So this is also a hint to merge these apps with the streaming. By the end of 2017, live streaming is expected to reach $5 billion. And that is surely expected to happen.

Globally, entertainment apps had the successful position in the third quarter of 2016. It is obviously known that entertainment apps have been used worldwide and they have good reach among the people. The revenues of both the app stores have grown.

In the global level, the entertainment apps are next to the social networking apps. They both have a good competition. And they both are the main reason for improving the app store revenue globally.

In the last quarter of 2016, entertainment apps were the second most downloaded apps in the Apple’s App store. As the revenue of both the app stores has grown up in the third quarter of 2016, it is sure that people use their mobile devices as the common form of payment, not only for the streaming content.

This shows that there is a shift in traditional broadcasting and the television structures. Consumption habits of the people have changed and mobile became their first screen to visit.

App store doubles Google play revenue

Globally, App Store has a revenue gap with the Google play store.A survey says that App store has double the revenue than the Google play store. But the Google Play store has 115% more downloads than the App Store.

The United States is the leader in the sector when it comes to both the App Store and the Google Play Store. The revenue from the combined is slowly overtaking Japan.

When it comes to the matter of downloads, the US is at the top. In China, the app store revenue can’t be generated by the Android. China is at the top of the iOS revenue. It is one of the huge milestones in the ecosystem of the app. China now learned the complexities of the market’s local infrastructure. Most importantly, the cultural preferences are more challenging for the success of the app.

In the first quarter of 2016, App Store revenues were more than fifty percent higher than the Play store. In the US, UK, and Japan, no games ranked in the top ten monthly active users list. These monthly active users (MAU) list was occupied by the social media and the messaging apps, in which Facebook, Facebook Messenger, LINE, Instagram, SnapChat, Twitter, and Whatsapp takes the main positions.

Messaging apps have an important place in the app economy, in terms of usage and adoption. In the first quarter of 2016, people spent more in the messaging apps than in other categories.

In the US, Facebook, SnapChat, and Instagram occupied the first three places. Pandora, YouTube, and Spotify occupy the next places and iOS Google’s search app comes in the last position in the list. This is the case in the first quarter of 2016.

The revenue of the app related usage is directly connected with the usage. That is, the more time the users spend on the app and how the business can reach their customers and how they raise their revenue with the help of an app. Ahead of Worldwide Developers Conference, Apple has announced some changes in the App store.

From the survey

Google play store has double the number of downloads than the Apple’s App Store. But it lacks in the revenue.

From the App Annie survey, China has a remarkable impact on the App store’s growth. Its revenue is increasing year-by-year. The revenue of China is overtaking Japan. The survey also indicates that the entertainment and the music apps are blasting in China and the United States. It results in, change in the revenue model.

The key points of the report are,

China’s revenue growth in the app store is twice larger than the previous year. Most of the mobile app purchases were made for the games.

Music and the Entertainment apps are exploding the app revenue in the US and China. The majority of the apps are adding subscription revenue models.

Emerging markets such as Argentina, Vietnam and Egypt show more interest in the Google Play Store. They get attracted by the games in it. Gamers of the different regions have different tastes and preferences.

China’s power

Chinese Users strongly prefer the iPhone. Most of the customers own iPhone 6 and iPhone 6s. China was the main reason for the record-breaking sales. The larger screen of iPhones is very popular among the customers in China. As Chinese customers started loving iPhones, they were interested towards the App Store. Earlier, the US was at NO.1 position and the Japan stood second in the App Store revenue. Now, China occupies the first place, and its revenue exceeds the other two countries.

China started to express its absolute growth from the third quarter of 2015 in terms of both the iOS app downloads and revenue. Games are the big money makers in this scenario. It is really hard to overtake the giant in any sector. China made it possible by engulfing the United States.

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Author: Peter Jordan

Peter Jordan is Head – Digital Marketing & Strategy of Zuket. He is a writer and coffee lover. He has is a graduate in Computer Science and Post Graduate in Entrepreneurship and leadership from Ulyanovsk State University, Russia. He is a passionate blogger & SEO Specialist. Zuket offers software products that are built with Airbnb, Uber, Zuket Scripts and other cloning scripts.

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