Mobile in-app purchases hit a whopping $150 billion figure.
In 2024, consumer spending on mobile applications surge by 12.5%, reaching an unprecedented $150 billion, indicating a growing comfort among users in making purchases on their mobile devices. According to the State of Mobile report by app intelligence provider Sensor Tower, the US led the way in revenue from in-app purchases (IAP), generating $52.4 billion, followed by China with $25.2 billion and Japan with $16.5 billion. The UK ranked sixth, contributing $4.84 billion.
Mobile games continue to dominate the global mobile spending landscape, accounting for around half of total spending. However, spending on applications outside of gaming has experienced exponential growth, reaching $69.2 billion in 2024 - more than three times the amount spent five years prior. Entertainment, productivity, and photo and video apps drove the growth in IAP revenue last year.
The domain of social media apps saw a remarkable shift in 2024, with more than half of the total time spent on apps dedicated to social media, marking an all-time high for the category. Users worldwide spent 3 trillion hours in total on social media and social messaging apps, an increase of 6% compared to the previous year. TikTok took the lead in both average revenue per user and short-form video usage, prompting rival social media platforms to diversify their revenue streams and invest in short-form video features of their own. IAP purchases became a more prominent source of income for social media companies, with IAP revenue on social media apps growing by 27.5% to reach a total of $13 billion in 2024.
Interestingly, AI apps witnessed significant momentum in 2024. Users spent approximately 7.7 billion hours on AI-based apps such as ChatGPT, Google Gemini, and Microsoft Copilot, while also spending $1.3 billion on these apps - nearly triple the amount spent in 2023. The US accounted for 45% of total consumer spending in the AI category, with the UK contributing 4% of the total revenue. ChatGPT emerged as the undisputed leader in the category, accounting for 40% of total consumer spending and 23% of total downloads. The AI app sector remains competitive, with 16 AI-based apps generating at least $10 million in IAP revenue in 2024.
Streaming platforms faced competition from social media apps in 2024, as time spent on mobile streaming apps declined 5.3% year-on-year, indicating a decrease in engagement. This trend was less noticeable in the UK, where time spent on mobile streaming apps declined only 2.7%, while IAP revenue grew 35.7%. In the US, where ad-supported subscriptions grew in popularity, brands spent $16 billion advertising on streaming platforms in 2024, a 10% increase from the previous year.
The global mobile app market exhibited impressive growth in 2024, with entertainment and gaming apps driving revenue, and vast spending in China, Japan, and the US, as well as iOS users worldwide, capturing the majority of the market share[5].
- The surge in mobile application spending in 2024, particularly on applications outside of gaming, can be attributed to the growing dominance of entertainment, productivity, and photo and video apps.
- Technology-driven applications, such as AI apps, experienced remarkable growth in 2024, with users spending nearly triple the amount on AI-based apps, like ChatGPT, Google Gemini, and Microsoft Copilot, compared to the previous year.
