Story image

Most smartphone users spend zilch on apps, survey finds

31 Jan 2017

More than half of smartphone users don’t spend money on smartphone apps, a new survey has revealed.

The survey, by analyst Gartner, shows that while users aren’t likely to spend money on paid-for downloads, end-user spending on in-app transactions is continuing to rise.

"Where users are prepared to pay for apps, spending on in-app transactions is on the rise — up 26 percent from 2015 — while spending on paid-for downloads only increased 4 percent in 2016," explains Stephanie Baghdassarian, research director at Gartner.

“In this year's survey, mean spending on in-app transactions was $11.59, while mean spending on paid-for downloads reached $7.67,” she says.

Paid-for downloads are more likely to be associated with smaller amounts of spending, according to the survey.  

Respondents who spent $15 or more over a three-month period were more likely to have done so through in-app transactions.

"This is largely because the vast majority of paid-for mobile apps have a price tag of $1.99 or less, while the activation of in-app transactions usually means that the user has found value in an app and will be happy to spend more on it," says Baghdassarian.

Gartner says age and gender also influence spending levels.

Older millennials (people aged 25 to 34 years) are the biggest spenders on both paid-for downloads and in-app transactions, with their in-app transactions generating an average of $19 per quarter and their paid-for downloads an average of $13.40. The second-biggest spenders are the younger Generation X (people aged 35 to 44), who spend more on in-app transactions than paid-for downloads.

"As respondents grow older, they seem to be less keen to spend money within an app, and would rather pay for an app upfront," says Baghdassarian.

"The 18-to-24 age segment shows low average spending on paid-for downloads and high average spending on in-app transactions, at $3.80 against $12.10. This trend is likely to continue as these young millennials grow older."

The survey also revealed noticeable differences in spending levels and usage between men and women for both paid-for downloads and in-app transactions.

Women not only spend less money overall on mobile apps, but also use them less. They are, however, more likely to try a "freemium" approach (the other name for the in-app transaction business model) that lets them try an app before deciding whether to spend money on it.

"Consumers' increased preference for in-app transactions is a clear sign that technology product marketing leaders working for app providers should invest in this model to provide flexibility in how they engage with app users," explains Baghdassarian.

Flexibility of business model is not the only requirement for a strong user experience, however. Brands should also investigate new ways of delivering content to users, as mobile apps may not always represent the best user interface.

"Bots and virtual assistants could prove better, depending on the user, the context and other requirements," says Baghdassarian. "At any rate, new and improved touchpoints are crucial for the success of any brand."

NZ investment funds throw weight against social media giants
A consortium of NZ funds managing assets worth more than $90m are appealing against Facebook, Twitter, and Google following the Christchurch terror attacks.
Poly appoints new A/NZ managing director, Andy Hurt
“We’re excited to be bringing together two established pioneers in audio and video technology to be moving forward and one business – Poly."
Unity and NVIDIA announce real-time ray tracing across industries
For situations that demand maximum photorealism and the highest visual fidelity, ray tracing provides reflections and accurate dynamic computations for global lighting.
NVIDIA announces Jetson Nano: A US$99 tiny, yet mighty AI computer 
“Jetson Nano makes AI more accessible to everyone, and is supported by the same underlying architecture and software that powers the world's supercomputers.”
Slack doubles down on enterprise key management
EKM adds an extra layer of protection so customers can share conversations, files, and data while still meeting their own risk mitigation requirements.
NVIDIA introduces a new breed of high-performance workstations
“Data science is one of the fastest growing fields of computer science and impacts every industry."
Apple says its new iMacs are "pretty freaking powerful"
The company has chosen the tagline “Pretty. Freaking powerful” as the tagline – and it’s not too hard to see why.
NZ ISPs issue open letter to social media giants to discuss censorship
Content sharing platforms have a duty of care to proactively monitor for harmful content, act expeditiously to remove content which is flagged to them as illegal.