Holiday Smartphone Sales Trends and the Opportunity for App Developers
But it’s not just the device manufacturers, networks and retailers who should be celebrating the opportunities provided by the holidays. The opportunity for app developers to reach new and highly engaged audiences is staggering – but they’ll have to move fast if they want to make the 2017 holiday season count.
So just how big is the holiday opportunity for the various stakeholders in the smartphone eco-system?
Millions of New Devices
In 2016, smartphone manufacturers saw nearly one-third of their annual sales in the last three months of the year, with consumers around the world buying more than 432 million units.
With high profile product launches from Samsung (who had a very difficult year in 2016 following the recall and withdrawal from sale of the Galaxy Note 7) and Apple already driving record sales, analysts believe Q4 sales could increase by some 5 percent in 2017 over the previous year.
Note: Samsung’s sales actually took an 8 percent dip in Q4 2016 – but the Korean manufacturer’s fortunes have bounced back following record-breaking launches of the Galaxy S8 and Note 8 devices. With Samsung hoping to shift 11 million units of the Note 8 alone, many industry experts are predicting a third successive record-breaking quarter for the company in Q4.
Primed and Loaded for Bargains
Bargain hunters are already being primed and loaded with advice on how to bag the best deals come Black Friday (November 24) with consumer deals websites suggesting they hold off buying a new smartphone until the big sales day hits.
Consumer deals website Dealnews.com reports the biggest Black Friday deals will be on Android devices, with significant savings on Samsung devices, suggesting a price of around $350 on the S8. It also suggests that lower-specification HTC and LG smartphones “might nearly be free”.
While great deals on Apple devices will be harder to find, Dealnews.com believes that consumers might find a number of stores (such as Best Buy, Target and Sam’s Club) potentially offering gift cards up to the value of $250 as an incentive to purchase the new iPhone 8 as they have done in previous years with models like the iPhone 7.
The site also suggests that the majority of the savings will be found online as opposed to instore. This is great news for anyone hoping to avoid any “real world” Black Friday madness and is in line with the growth of mobile commerce. In 2016, 48 percent of online orders were generated via mobile devices on Black Friday, up from 40 percent the previous year.
Go Big for the Holidays
It’s not just the demand for smartphones that’s big – it turns out we really like big phones as well.
Larger smartphones have really grown in popularity over the past few years and in 2016 completely dominated the mobile device landscape, pushing sales of tablets down from 17 percent of the market in 2013 to just 9 percent last year.
Medium-sized smartphones (3.5 to 4.9 in) and so-called “phablets” (5 to 6.9 in) now dominate the market with 82 percent of sales in the run up to the holidays in 2016. Smaller phones (once the holy grail of mobile device trends) are virtually extinct with just 1 percent of sales. This suggests that smartphone users want to do so much more with their devices than the standard phone, email, text and social media functionality of a few years ago (words that should bring a tear of joy to any app developer’s eye).
The Opportunity for App Developers
OK, so we already know that there are a lot of new devices purchased in the run up to the holidays. We also know that many of these smartphones are gifted – this is because device activations and app downloads simply go through the roof on Christmas day. But this doesn’t mean app developers have an easy ride of it over the holidays.
With so many app downloads, you can bet competition in the major app stores is fierce. With more than 2,500 apps added to the Google Play Store every single day, even the most optimized entry has the potential to be pushed out of sight. In this highly competitive space, many great apps will struggle to find an audience.
And then there is the fact that nearly 50 percent of smartphone users (accounting for 216 million devices sold in Q4 2016) will simply never download additional apps to their devices after activation.
While the rest of the smartphone population will download one or two apps per month, it’s a relatively small 13 percent of users who account for more than half of all apps downloaded every month.
Note: For many people, app usage begins and ends with high-profile services like Facebook or YouTube. In fact, a recent report by ComScore suggests that seven out of the top 25 apps downloaded in the US were owned by either Facebook or Google.
Despite the rather major hurdle of discoverability (or even getting people to give a damn about your app) there are obviously numerous rewards for developers who persevere.
Note: The only way you can guarantee a user will, at the very least, be presented with an opportunity to activate your app is to pre-load it via the device manufacturer or mobile carrier. There are of course many other benefits of adopting this strategy.
Long Tail Activations
Once on a device, app developers have a substantial opportunity to drive activations. According to an article in Forbes, 40 percent of Android smartphone users upgrade their devices every two years. A larger group of users (47 percent) keep hold of their smartphones until they become obsolete or stop working.
This gives app developers the opportunity to encourage users over an extended period of time, through a range of activities including traditional marketing, PR and peer-to-peer or word-of-mouth promotion, to activate and engage with an app. The familiarity caused by seeing it so prominently featured from the moment the device is unboxed – making the process somewhat easier.
For example, an app for an eBook reader (like the Amazon Kindle app) or game might not be activated until the user finds themselves at a loose end and with no other form of entertainment decides to explore the options on their smartphone. Similarly a user might not activate a ride sharing app like Uber or Lyft until they find themselves in an unfamiliar city and in need of a safe ride back to their hotel. Both scenarios could happen weeks or even months after the host device has been activated.
In many ways a pre-loaded app on a mobile device is the modern day equivalent of the old-fashioned classified advert for a plumber in the back pages of a newspaper. You see the advert every day but only engage with it when the time is right. The fact you’ve seen the same advert time and time again means you won’t go elsewhere (in today’s environment you can replace the classified ad pages with an app store).
Still Time to Celebrate the Holidays
Pre-loading apps on targeted devices or carrier networks couldn’t be easier with Digital Turbine. Thanks to our long-held and trusted connections across the global mobile eco-system, the process can take days rather than weeks. Simply tell us who you want to target and we’ll do the rest. Our flexible packages also improve marketing efficiency, reducing waste and protecting you from marketing nasties like click and attribution fraud.
This means we can position your apps in front of an audience of millions in time for the holidays and help you reap the rewards from greater activation and engagement long into the future.
To learn more about how pre-loading can help you wrap-up app success, speak to a Digital Turbine advisor today.