The app economy is one of the primary forces in monetisation in the digital age. In Singapore, more businesses are going online, and startups are adopting a digital first approach.
Mobile app stores and applications have also seen a year-on-year increase in revenue especially through mobile ads, as digital ads become the marketing tool of choice for businesses across industries.
And in 2017, apps are expected to play an even larger role this year.
App Annie, your friendly neighbourhood app data and insights analysts, just published a prediction of what they think will happen in the 2017 app economy.
Apps Will Be Rolling In The Dough
App Annie forecasts that the gross expenditure on apps will hit US$166 billion in 2017.
Apps alone are expected to account for around US$65 billion, while the rest will come from advertising or more specifically, in-app advertising. These will account for some US$101 billion and will mainly be driven by social media, video streaming, and game apps.
As such, you can expect more video ads to pop-up on your phones as brands move away from using just static images.
While mobile games are still in pole position to rake in the cash, dating and streaming apps are projected to enjoy intense growth this year – a view we can all fully agree on.
The 2017 forecast also reported a 52% growth of time spent on mobile shopping on Android mobiles in 2016, largely thanks to the explosive rise of e-commerce. With traditional retailers also jumping on the app bandwagon, the digital storefront is set to become even more prominent.
The Video Battle
Thanks to the likes of Netflix and co., traditional television has been disrupted in a huge way.
This is mainly because companies such as Netflix view themselves as a network rather than a premium video streaming service, and are thus in direct competition with traditional TV networks.
A quick look at Amazon Prime will show you that these on-demand video streaming sites are investing a substantial amount of their finances into creating original series and content with blockbuster budgets. However, their limited video library still puts them at an disadvantage against traditional media companies.
This opens up opportunities for short-form video content, with sites like YouTube and Facebook (even Snapchat to an extent) poised for immense growth.
Chatbots Will Be Present, But Not Prominent
2016 was a year when companies decided to dive into the realm of Chatbots.
From their own websites to Facebook Messenger, Chatbots have been a helpful in ensuring customer queries are addressed without the need for actual customer service staff.
App Annie though, predicts that the impact Chatbots have will be negligible. This is because they rely on text and automated conversations – two things apps are moving away from.
The biggest app growths are in food delivery and ride hailing sectors, and both have already moved away from a text-heavy interface towards a graphical user interface (GUI), such as the one seen in Uber’s app.
Love it or hate it, Pokémon GO was the defining app of of 2016, and it looks like growth will continue in 2017 with new additions and features to be introduced.
A key reason as to why Pokémon GO will remain strong is because it simply cannot be copied.
Just take a look at the likes of Diner Dash, Candy Crush, and Clash of Clans. All of them have been imitated to death due to their fairly simple game mechanics, graphics, and programming.
Niantic’s Pokémon GO however is built on a “valuable technology stack” as well as millions of user-submitted information on locations collected via their previous hit game, Ingress.
It is precisely because of these reasons that the only game copycats will come from the developers themselves. Much like how Pokémon GO was based on Ingress, future games by Niantic could draw inspiration from their predecessors.
Mobile Augmented & Virtual Reality
On the topic of Augmented Reality (AR), Pokémon GO is the key reason it has now become mainstream. Some smartphones may have had default camera apps with AR function to put dinosaurs into your selfies, but those were gimmicks at best.
With Google’s Project Tango still a pipe dream waiting to go mainstream, it is up to app developers to embrace AR, and App Annie is expecting more brands to experiment with AR this year.
On another plane, we also have Virtual Reality (VR).
Much to the dismay of the tech community, VR hasn’t taken off as much as they had hoped. VR tech such as the Oculus Rift and HTC Vive require high tech specifications, and these compound the costs of owning one. Even before they’ve tried it out, the mainstream consumer has already been turned off from wanting one.
That doesn’t mean that VR isn’t growing however, and once again we have mobiles to thank. Accessories such as the Samsung Gear VR and Google Daydream are expected to boost adoption of mobile VR, and drive down costs of the technology.
Here, news, sports, entertainment, and education are predicted to be the main types of 360° content consumed.
And Everything Else
Smart home devices have seen increased growth over the holiday season thanks to Amazon and their Alexa-enabled devices. Google Home has also emerged as a direct competitor to the Amazon Echo line of devices, allowing consumers to experience Google’s version of smart homes.
The wearables market has also been very quiet. Smartwatches spent the year fading into obscurity, and it was not till Snap Inc. (Snapchat) launched their Spectacles that there was a renewed interest in wearable tech.
Hardware will also be taking a backseat this year, as companies seek to capture market share through the app economy, with a focus on digital content and advertising.
There is no doubt you will see a new iPhone or Samsung Galaxy debuting this year, but it is the apps they run that will be the true cash cows this 2017.
Check out the latest industry with the highest retrenchment rates in Singapore here.