Deloitte: App downloads market reaching saturation

20 August 2014

Research by consulting firm Deloitte shows that the number of app downloads is decreasing. In addition, 9 out of 10 smartphone users never pay for their app downloads. The increasing number of older and long-term smartphone users contributes to the decline in app downloads.

Smartphone users are less keen on downloading new apps. The number of monthly app downloads has decreased drastically as is shown by a research of accounting and consulting firm Deloitte among UK smartphone users*. Almost one-third of UK users do not download any apps in a typical month, which is a steep increase of the 20% in 2013. Also the number of downloads per user declined from 2.32 in 2013 to 1.82 in 2014.

In addition to 31% of smartphone users never downloading a single app, 9 out of 10 users say they never spent money on apps. This result suggests that the demand for paid apps is even lower than for free apps. “We are reaching a limit in the UK in the volume of app store downloads,” told Paul Lee, Partner at Deloitte UK, the Financial Times. “Each additional new smartphone [owner] has less inclination to download apps, either out of apathy or, at a more global level, affordability.”

Deloitte - App market

One of the reasons, given by Deloitte, for the decline in app downloads, is the increase of smartphone users over 50. These users are more interested in using their phone for calling and texting and less as a data device. A different reason is the increasing number of long-term smartphone owners. The users in this group have their preferred selection of apps installed and do not see the need to add new ones; this is especially the case with very good and trustworthy apps.

App market
The decline in app downloads worries the app industry and raises questions about the financial health of the app economy. Deloitte’s report comes at a time of intense debate among app developers that are concerned that the app market might have passed its peak growth. Despite the decline in downloads, Lee states that the size of the app market itself is not declining. This can be backed by Google’s claim that the app development industry is forecasted to be worth over £30 billion by 2025 in the UK.

* The UK is seen as a country with a relative large number of ‘early adopters’, and is hence viewed as an indicator for the rest of the mobile industry.


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