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Mobile App Payments Fishing For Whales And Minnows

Report by Karol Severin
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The 20,000 Foot View

       of mobile app revenue is concentrated in        of app buyers with the majority of that revenue driven by in-app purchases. These ‘whales’ are the beating heart of the mobile app economy but their small number means that they make precarious foundations for the market. In a similar manner to the music industry, a large part of total revenue is driven by a small number of super-fans, while the vast majority of mainstream consumers remain free users. As a result any behavioral change among the small body of buyers has the power to shape the entire global app economy. 

Key Findings

  • Only        of consumers pay to download apps or make in-app payments
  • Downloads and In-App Purchases (IAP) account for        of total app revenue
  • Smartphone penetration and app payment penetration do not always correlate 
  • Smartphone penetration has an even gender distribution, but        of app payers are male
  • Although the majority of app revenue comes from in-app buyers, the pool of app buyers is approximately        larger
  • King has        million active monthly users, only        million of whom account for its entire revenue representing a        free-to-paid conversion ratio
  •        of app users spend        or more per month, accounting for        of revenue from app spenders        of app users spend below        per month, accounting for        of revenue from app spenders
  • IAP bundling provides a potential route to mainstream consumers, but over bundling could lead to app economy devaluation

Companies mentioned in this report: Apple, Google, KING

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