Social media and entertainment apps recorded the highest consumer usage and spending in 2023, as the mobile apps market rebounded after a year-long slowdown in 2022, a new report now shows.

The State of Mobile 2024 report published by mobile analytics platform data.ai, now pegs the value of the global mobile app economy at $500 billion (Sh79.2 trillion in current exchange rates) and predicts ‘a record-breaking year’ for app developers in 2024.

“The mobile app economy is now a half-a-trillion-dollar market, with nearly $1.5 billion (Sh237.5 billion) in spending each day in 2023 across app store spend and mobile ad spend. This included $362 billion (Sh57.3 trillion) in mobile ad spend, which was an eight percent year-on-year increase,” notes the report.

“During the year, app store spends hit a new high at $171 billion (Sh27.1 trillion), which was a three percent year-on-year increase following a two percent dip in 2022. In total, a record $533 billion (Sh84.4 trillion) was spent on mobile in 2023 across app stores and advertising.”

Apart from revenue, other metrics used to measure performance in the market, including the number of app downloads and the amount of time spent on the applications, indicated strong growth to new all-time highs.

The total number of hours spent, for example, grew six percent from the 2022 record to hit 5.1 trillion, with every user spending an average of five hours per day which translates to over half of daily working hours.

App downloads, on the other hand, recorded one percent increase to 257 billion on both iOS and Google Play Store, translating to 489,000 apps downloaded per minute during the entire stretch of the year.

Social media and entertainment apps, which have emerged as key anchors in the creative economy, led the market in driving a rebound of consumer spend, with TikTok laying the ground via its tipping mechanism by amassing over $10 billion (Sh1.6 trillion) in lifetime spend.

“Consumers are shifting their spending habits. Popularised by TikTok, they are opting to spend directly in the app via 'tips' to their favorite content creators, opening the door for subscriptions,” the report notes.

Apps in the entertainment category witnessed a $1.72 billion (Sh272.3 billion) growth in consumer spending, while social media applications posted a $0.98 billion (Sh155.1 billion) rise during the year.

“Social and entertainment apps experienced double-digit growth, with time spent up 12 percent to three trillion hours and spending up 10 percent to $29 billion (Sh4.6 trillion),” reads the report.

Others were utility and productivity apps with an annual growth of $0.92 billion (Sh145.6 billion), books and reference ($0.61 billion/Sh96.6 billion) photo and video ($0.43 billion/Sh68.1 billion), generative AI ($0.41 billion/Sh64.9 billion), health and fitness ($0.39 billion/Sh61.7 billion), business ($0.36 billion/Sh56.9 billion) and education ($0.34 billion/Sh53.8 billion).

“Social apps and the creator economy pioneered new pathways to monetisation beyond advertising. In 2024, direct consumer monetisation in social apps through In-App Purchases is set to grow 150 percent to $1.3 billion (Sh205.8 billion) as competition ramps up,” states the report.

On the downside, mobile gaming continued on the decline trend that commenced in 2022, weighed down by inflation and stringent regulations.

Last year, gaming spend decreased to $107 billion (Sh16.9 trillion) which translated to a two percent dip compared to 2022, while downloads remained steady at 88 billion, driven chiefly by Hypercasual, Simulation and Action genres.

“Mobile gaming was one of the industries hit hardest in 2022 by inflation and regulations. The two percent annual decline in consumer spend last year looks like a continuation of the four percent decline in 2022,” noted data.ai.

Apps within the Generative AI landscape emerged as trailblazers for a new order after recording an explosive growth of up to seven times year-on-year, which saw the advent of new sectors such as AI Chatboats and Art Generators.

The AI growth also fueled embedded features across virtually all mobile sectors, paving the way for a fresh wave of digital innovation. Some of the notable Generative AI apps that came to light during the year include ChatGPT, Ask AI and Character AI.

“The launch of ChatGPT propelled further growth to the AI Chatbot space in particular. The new chatbot app from OpenAI found immediate success following its launch on iOS in March 2023 (soon followed by its launch on Google Play in July). Generative AI apps also surpassed $10 million (Sh1.6 billion) in monthly consumer spend by late 2023,” the report reads.

Travel apps saw a 13 percent growth in downloads compared to 2022 to hit three billion last year, outpacing the 2.2 billion downloads recorded in 2019 before the outbreak of the pandemic.

Tour bookings, flight bookings and integrated travel services led the sector’s growth, jumping 80 percent, 43 percent and 26 percent respectively.

Further, ticketing apps as a sector saw demand soar by 31 percent, driven by Swifties and Bey-Hive fans, marking a 66 percent increase from pre-pandemic levels.