App downloads decline while revenue soars in US App Store

In the US App Store, a noteworthy trend is emerging, affecting both large and small companies alike. Many apps are experiencing a drop in downloads, even as the overall revenue generated from the App Store continues to rise. Data from app intelligence firm Appfigures reveals that some of the most prominent apps are gradually losing their appeal in the face of intensifying competition, which is contributing to an overall decline in app installations. 

It’s important to note that this decline is not substantial enough to unseat the dominant apps in the market. For instance, Facebook remains consistently among the most downloaded apps each month. Nevertheless, it represents a discernible slowdown with some impact. 

This analysis specifically focuses on the US App Store and relies on Appfigures’ Mobile Market Index. This tracks the downloads and revenues of the top 25 apps in each category and country and compares this data to that of January 1, 2018, providing insights into app growth over time. 

In the previous year, the Mobile Download Index, measuring app installs, stood at 91.87. While this already indicated a slight decline from 2018 data, it was not a significant drop. However, by August 31, 2023, the Index had fallen to 83.59, marking an 8.28-point decrease,or a 9% decline from its starting point. This suggests a worsening trend. The Download Index had experienced fluctuations over the past year, with a temporary increase in December 2022, typically a peak month for new app installs due to holiday season device activations and increased user leisure time. However, these gains receded by April, with the Index dropping to as low as 64.50 points. 

It’s worth noting that not all app categories are impacted by this decline. Categories such as sports streaming, medical, business, education, shopping, travel, and productivity apps continue to grow or remain stable. Conversely, news, games, entertainment apps, and several others have witnessed double-digit declines, likely due to market saturation. Overall, a substantial number of apps across various categories are experiencing declines rather than growth. 

“I think the main reason is that the big apps slowly losing their appeal as new entrants come in,” Appfigures co-founder and CEO Ariel Michaeli said in regards to the Download Index falling. “Acquisition has also become hard thanks to App Tracking Transparency, but I don’t think that’s the primary driver behind this,” he also added.

While the top of the App Store has seen changes in recent months, with Meta’s dominance receding and other apps like TikTok, CapCut, Temu, and Shein rising, the app economy is not entirely bleak. At the time of writing, Meta’s Threads is the only non-gaming app in the US App Store’s top 10 free apps, holding the second position. 

App revenue in the US has continued to grow, even amidst declining installations, as developers have shifted their focus towards monetization. Last year, the Mobile Revenue Index stood at 363.13, significantly higher than in 2018. As of August 31st, it has risen further to 458.3, representing an increase of 122.17 points (36.4%) from its starting point.

Notably, Productivity apps experienced the most significant revenue growth in the past year, with a remarkable 69.3% increase. In the games category, Board games saw the highest growth, surging by an impressive 584.9%. Only four US App Store categories recorded revenue declines last year, all of which were in the games category—Sports, Racing, Music, and Action.

In summary, while app downloads are declining in the US App Store, the app economy continues to thrive, with developers focusing on revenue generation and various categories experiencing substantial revenue growth.

Additionally, a study conducted in May showed that App Store revenue of small developers increased by 71% in the last two years.