Consumer spending on mobile apps increased 12.5% year-on-year in 2024 to reach $150 billion, signalling that consumers are increasingly comfortable making purchases on mobile.
According to app intelligence provider Sensor Tower’s annual State of Mobile report, the US brought in the most revenue from in-app purchases (IAP) at $52.4 billion, followed by China with $25.2 billion and Japan with $16.5 billion. The UK ranked sixth, bringing in $4.84 billion.
Mobile games still account for around half of global mobile spending, but revenue from apps outside of gaming has more than tripled in the past five years, reaching $69.2 billion in 2024. Entertainment, productivity, and photo and video apps led the growth of IAP revenue last year.
Social media apps diversify their revenue streams
More than half of the total time spent on apps was on social media — an all-time high for the category. Hours spent on social media and social messaging apps increased by 6% compared to the previous year, reaching a total of 3 trillion hours globally.
TikTok led the category in both average revenue per user and short-term video usage. TikTok’s popularity has led rival social media apps to diversify their revenue streams and invest in promoting short-form video features on their own platforms.
IAP purchases are increasingly becoming a more prominent source of income for social media companies – in 2024, IAP revenue on social media apps grew by 27.5%, reaching a total of $13 billion.
AI apps stole the show
Unsurprisingly, AI apps had a strong year. People spent 7.7 billion hours on AI-apps, like ChatGPT, Google Gemini and Microsoft Copilot, and they also spent approximately $1.3 billion on them, which was almost triple the amount spent in 2023.
The US accounted for 45% of total consumer spending in the category, with the UK coming in second with 4% of total revenue.
ChatGPT emerged as the leader in the category, accounting for 40% of total consumer spending and 23% of total downloads. Competition in the category remains strong, with 16 AI-based apps reaching at least $10 million in IAP revenue in 2024.
Streaming faces competition from social media
While streaming platforms’ IAP revenue increased 31.3%, and downloads increased 7.2%, time spent on mobile streaming apps was down 5.3% year-on-year, signalling that competition from social media apps is impacting engagement. This trend is less prominent in the UK — time spent on mobile streaming apps here went down only 2.7%, while IAP revenue grew 35.7%.
In the US, where ad-supported subscriptions have gained traction, brands spent $16 billion advertising on streaming platforms in 2024, a 10% increase from the previous year.
You can access the full report here.