App Annie Index - Market Q2 2013: Google Play Exceeds iOS App Store in App Downloads by 10% in Q2 2013

App Annie Index - Market Q2 2013: Google Play Exceeds iOS App Store in App Downloads by 10% in Q2 2013

Welcome to the App Annie Market Index, where at the end of each quarter, we review the latest download and revenue insights by stores, countries and categories. In addition to our monthly Games and Apps Index, the Market Index provides you with a macro view of the trends, helping you identify where to look for the most fertile investment opportunities in the app stores.

Key trends across stores, countries and categories

Riding strong performances in India and Brazil, Google Play’s total app downloads were higher than those in the iOS App Store in Q2 2013. Though Google Play had more downloads, the iOS App Store still generated 2.3x the revenue.

The top of the country rankings for downloads and revenue in the iOS App Store and Google Play remained stable, but a couple emerging markets stood out from the pack in Q2 2013:

• Russia has climbed six spots in the iOS App Store download rankings since Q2 2012 and broke into the top 5 in Q2 2013. This growth put Russia in the unique position as the only other country besides the United States in the top five countries by downloads for both the iOS App Store and Google Play.
• Brazil climbed two spots and joined India and Russia in the top countries by downloads for Google Play, further establishing Google Play’s leadership position in those emerging markets.

Games continued to dominate the share of revenue for both app stores, and still accounted for a greater share in Google Play where it comprised over 80% of revenues vs. roughly 75% in the iOS App Store.

While country rankings remained relatively stable, there was significant movement in a number of categories during Q2 2013:

• The substantial growth of Music and Social Networking apps helped drive iOS App Store revenue.
• Communications apps surged to #2 behind Games for Google Play downloads.
• The Travel & Local category climbed two spots to #5 in the top categories by revenue for Google Play.

The Store Index

iOS App Store vs. Google Play App Downloads & Revenue

Google Play downloads 10% higher than iOS App Store downloads, while iOS App Store generated 2.3x the app revenue of Google Play in Q2 2013As of Q2 2013, app downloads in Google Play were about 10% higher than those in the iOS App Store. Though Google Play led the iOS App Store in one key measure, there still remained a wide gap in app monetization, as the iOS App Store generated 2.3x the app revenue of Google Play.

The Country Index

Russia continues its strong growth and breaks into the top 5.

The United States and China retained their positions at the top of the rankings and combined to make up about 40% of total iOS App Store downloads in Q2 2013.  China’s iOS downloads continued to grow at an impressive rate, underscoring the country’s eventual potential for the iOS App Store, as mentioned earlier in the December 2012 App Annie Index. China is a unique market because it isn’t dominated primarily by the iOS App Store and Google Play.  Baidu, China’s leading search engine, announced on July 15, 2013 that they signed a memorandum of understanding to purchase 91 Wireless, one of the leading third-party app stores that deliver both iOS and Android apps.  Third-party app stores play a significant role in the Chinese app economy, both for Android devices that can’t connect to Google Play and jailbroken iPhones.

 

Russia climbed three spots and broke into the top 5 in Q2 2013, continuing an impressive growth rate that saw them pass six other countries since Q2 2012, when they were the 11th ranked country by iOS downloads.  This meteoric rise in the rankings echoed the gains they made in Google Play downloads where they climbed from #9 in Q2 2012 to their current position at #4.  However, their position in the iOS App Store download ranking could be at risk after news that one of Russia’s top mobile operators, Vimplecom, joined MTS and Megafon, Russia’s other largest mobile operators, in their decision to stop selling the iPhone.  One issue that complicated the iPhone negotiations is that Russia does not allow mobile operators to subsidize handset sales.  Mobile operators will still push iPad sales and Russian consumers will still be able to purchase iPhones through the mobile operators’ resale stores and other mobile phone, but this could slow down the iOS App Store’s growth.

 

The United States and Japan account for about half of the total iOS App Store revenue in Q2 2013.The United States, Japan and United Kingdom remained the leaders in the iOS App Store when looking at revenue generation, and Australia climbed to #4 after a strong Q2. iOS App Store revenue was driven primarily by the United States and Japan, which combined to account for about half of the total iOS App Store revenue in Q2.

Brazil joins India and Russia to strengthen Google Play’s position in emerging markets.Google Play saw Brazil climb two spots to join India and Russia as another emerging market in the top 5 countries by downloads for Q2 2013. Brazil’s growth was driven in particular by the gaming category. Android’s open platform has given Google Play a very strong position in these markets because cell phone manufacturers like Samsung, Nokia, HTC and LG are offering cheaper handsets and already have established distribution channels to market and sell their products. The combined downloads for the United States, South Korea and these three emerging markets comprised over one-third of the total Google Play downloads in Q2 2013.

Japan, South Korea and the United States combined to account for about 70% of Google Play revenue in Q2 2013.Japan, South Korea and the United States held on to their positions at the top of the rankings and continued to lead growth in Google Play revenue. Combined, they accounted for about 70% of total Google Play revenue. As in Q1 2013, the Games category continued to drive revenue in each country in Q2, but even more so for the top 2 ranked countries, where it accounted for over 90% of total Google Play revenue in Japan and over 95% in South Korea.

The Category Index

Lifestyle apps climb to #4 while the top 3 categories maintain their rankingsThe Games category maintained its dominance in the iOS App Store, accounting for roughly 40% of store downloads in Q2 2013. Photo & Video held onto the #3 position it achieved in Q1, but Utilities fell to #5 as the Lifestyle category rose to #4.

Apps like eBay, Emoji, and Groupon helped propel the Lifestyle category over Utilities.
Check out these apps on Store Stats.

Social Networking and Music apps unseat the Productivity category for the first time in the past four quartersGames continued to dominate, accounting for nearly three-quarters of total iOS App Store revenue in Q2 2013, up from about 70% in Q1. The Social Networking and Music categories have grown their revenue dramatically in the past year and unseated Productivity, which has held the #2 spot for the past year. Social Networking apps climbed six spots from #8 in Q2 2012, while the Music category climbed four spots from #7 during the same time period. One interesting aspect of Social Networking’s rise in the iOS App Store revenue rankings that was covered in the February 2013 App Annie Index is that it was not mirrored by a similar rise in the store’s download rankings, meaning that the category’s level of monetization drove growth more than an expansion in the user base.

Pandora, Magic Piano, and Radio help guide the Music category into the Top 3.
Check out these apps on Store Stats.

Communication climbs into Top 2 ahead of Tools and Entertainment.Games continued to lead Google Play downloads in Q2 2013 and still accounted for about 40% of all downloads, but the Communication category rode a wave of momentum that pushed it ahead of Tools and Entertainment. Although the Tools, Entertainment and Social categories grew at a slower rate than the Communication category, they all still had strong gains in the past quarter that enabled them to hold onto their top 5 ranking. While the categories for the iOS App Store and Google Play are defined differently, there seems to be a trend across both app stores where functional categories like Utilities, Tools and Productivity are not keeping up with more connective categories like Social Networking and Communication.

LINE, WeChat, Skype, WhatsApp Messenger, and Viber propelled the Communication category into the Top 2 for Q2 2013. Click here to access this interactive chart for free.

The Games category continues to drive revenue while Travel & Local cracked the top 5.The Games category continued to drive revenue in Google Play, and still to a greater extent than the Games category in the iOS App Store. As of Q2 2013, Games in Google Play accounted for over 80% of revenue, compared to roughly 75% for the iOS App Store. Games might have been the main driver of Google Play’s revenue growth, but the Communication category also saw solid growth to retain its position at #2. Although it did not grow as much as Games or Communication, the Travel & Local category grew enough to push it into the top 5, displacing the Productivity category that held the #5 spot in Q1 2013.

Travel & Local category revenue was led by navigation apps.
To see this chart and others like it for free, click here.

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To get an update on the top apps in the iOS App Store and Google Play for June 2013, please be sure to check out App Annie’s latest Games Index and Apps Index. Subscribe to the blog below, follow us on Twitter or ‘like’ us on Facebook.

 

Notes:

• App store metrics reported in this article are based on data from App Annie Intelligence . As footnoted in earlier App Annie Index reports, market-level metrics have up to now represented the aggregation of countries that were measured by App Annie Intelligence during that data period. Throughout Q1 2013, App Annie Intelligence for Google Play measured data across 44 key countries, and the Market Index reported on the aggregation of those 44 countries. Effective with Q2 2013 data, the App Annie Index now reports market-level metrics that represent the full worldwide geography for both iOS and Google Play.
• App Annie Intelligence is currently available for the iOS App Store and Google Play. It does not currently provide estimates for other app stores, such as the Amazon Appstore. While in many countries, iOS and Google Play represent a significant portion of the app market, that is not the case for some countries, e.g. China.
• App Annie Intelligence revenue estimates reflect app store revenue earned from paid downloads and in-app purchases. They do not include revenue earned from in-app advertising.
• App Annie Intelligence revenue estimates represent the net revenue that the publishers earned from the app store; they exclude the fees taken out by Apple and Google. Currently, iOS App Store and Google Play each take a 30% cut.
• The Indexed Downloads metric provides an easy way of comparing different downloads numbers against each other. For example, if Q4 2012 has Indexed Downloads of 100 and Q1 2013 has Indexed Downloads of 200, then Q1 2013 downloads are 200/100=2 times as high as Q4 2012 downloads. If Q1 2013 has Indexed Downloads of 80, then Q1 2013 downloads are 80/100=80% of Q4 2012 downloads. The same applies to the Indexed Revenue metric.
• In the iOS App Store, a publisher can categorize their app under a Primary Category as well as an optional Secondary Category. All category analysis in the App Annie Index has been conducted based on the app’s Primary Category only. This approach prevents any overlap or duplication among categories, and therefore allows us to size the categories and analyze category share changes properly. It also allows us to identify the true category growth even if apps are increasingly added to secondary categories on a macro basis.
• In Google Play, an app can be categorized under only one category, so there is no overlap across categories.
• In both the iOS App Store and Google Play, a publisher may decide to shift its own existing app from one Primary Category to another Primary Category. This potentially may cause a trend break in app store’s category data, depending on the download or revenue volume associated with the recategorized app(s).