Most Smartphone Users Spend Nothing on Apps

Most Smartphone Users Spend Nothing on Apps

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Over half of smartphone users spend no money on smartphone apps (paid-for downloads and in-app transactions), according to a new survey by Gartner. However, end-user spending on in-app transactions continues 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," said Stéphanie 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.

Paid-for downloads are more likely to be associated with smaller amounts of spending. 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," Baghdassarian added.

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.

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.

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