Recent Data Shows a Drop in US App Store Downloads Despite Surging Revenues

A recent study by analytics firm Appfigures has uncovered a paradoxical trend in the US app store - a decline in downloads even though revenues continue to rise. The Mobile Download Index, which keeps track of app installs, stood at 91.87 last year.

While this was already lower than the Mobile Download Index in 2018, the drop was much sharper this year. As of August 31st, the index stood at 83.59 - about 9% lower than the previous year.

Revenue growth has far outpaced the slowdown in downloads as more developers are focusing on monetization.Appfigures

The new data is concerning for small and large companies alike, which are seeing their app downloads drop in the face of growing competition. The Mobile Revenue Index is on a steady rise, jumping from 363.13 in 2018 to 458.3 in 2023.

A Closer Look at the Data

The Mobile Market Index works by tracking the downloads and the revenue of the top 25 apps in the store under every category and county. It then compares the numbers against those recorded on January 1, 2018, offering a quick look at the growth or decline over the years.

Only four app categories witnessed a drop in revenues in the US app store, all of them being game-related - Sports, Racing, Action, and Music.

A closer evaluation of the index shows that the drop in app downloads continued till December. The holiday season saw a spike in new device sales and app downloads, but it died out again in April, with the index plummeting as low as 64.50 points. It rose once again in summer but failed to reach the same numbers as the previous year.

The revenues grew pretty consistently, with a major bump during the holiday season in December when the app downloads spiked. Productivity apps are faring the best, with a 69.3% growth over the last year. Among games, board games saw the largest growth - a staggering 584.9%.

In the third fiscal quarter this year, Apple reported over $21 billion in services revenue. This also includes revenue from the company's own services, a majority of which are generated via the app store. Last month, Apple passed the mark for 1 billion paid subscribers.

Implications of the New Trend

The decline in app store downloads isn't taking place at a rate fast enough to topple the most downloaded apps from the rankings. For instance, Facebook continues to be one of the top apps in the app store despite the fact that the slowdown would surely have some impact.

However, companies that rely largely on app downloads for revenue, especially social media platforms, are already beginning to feel the effects of the decline. Both Facebook and Twitter have witnessed a significant drop in daily active users, especially among the younger generations.

The same goes for a number of gaming giants, which have been experiencing a decline in downloads. Competition in the app store is clearly rising with the introduction of new apps and games.

I think the main reason is that the big apps are slowly losing their appeal as new entrants come in.Ariel Michaeli, Appfigures CEO

True enough, the decline in downloads and users for older social media platforms like Facebook is largely due to the user preference shifting to alternative entertainment options like TikTok and other streaming services.

Developers would have to constantly adapt to the shifting trends and user preferences to keep up with the changing trends.

The post Recent Data Shows a Drop in US App Store Downloads Despite Surging Revenues appeared first on The Tech Report.