This Week in Apps #83 - Will the HomePod Kill Christmas for Google and Amazon (Again)?

U.S. Revenue Index (30 Day)

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Insights

LinkedIn announced yesterday that it'd stop its operation in China. It's not that surprising of a move considering LinkedIn's original announcement, back in 2014, highlighted how they won't let the Chinese government muffle users of the platform.

Looks like they had it! LinkedIn's announcement explained that they chose to exit the market instead of continuing the endless fight with the government. It's a bold statement to make and one that could trigger similar actions from other companies and possibly backlash in China.

But what's LinkedIn giving up by leaving?

Not much, just its second-largest country in terms of app downloads...

According to our App Intelligence, in 2021, the top 5 countries in terms of downloads for LinkedIn's iOS app were the U.S., China, Brazil, India, and France. The U.S. is way ahead of the rest, with around 4M estimated downloads, and China with around a million.

Although it's the second-largest country in absolute terms, when we look at the global take, China accounted for 6.6% of downloads on the App Store in 2021. In terms of revenue, the share is even smaller. China accounted for just 1.9% of LinkedIn's in-app revenue on the App Store in 2021, according to our estimates.

So it's not just the Chinese government being more demanding but also that it's simply not worth the effort for such a small share of users.

BTW - I skipped the Android app because Google Play doesn't operate in China, and I wanted to keep things even.

It's been a little over a month since Twitter released Super Follows. If you recall, the launch was mostly meh in terms of revenue. Sure, the list of creators is limited, and it's only available in the U.S., and only for iPhone and iPad users. Still... I expected a bit more.

Let's check in and see if the trend has changed.

Twitter has earned $20K of net revenue from the U.S. App Store since September. That's a K, not an M, in case you weren't paying close attention. The short answer to our question is not really.

But it gets a bit worse. The sum, which is roughly double what we estimated for launch week, came from a peak and not healthy growth. New revenue peaked last Monday with an estimated $2K of new net revenue. Remember what else happened on that day? Facebook went down. See the connection here?

Daily revenue went back into the "few hundreds" range by this week.

Much like Spaces, Twitter's take on Clubhouse, Super Follows remind us that the Twitter crowd may be happy with what Twitter is right now and isn't looking for something new. It doesn't mean Twitter can't change that perception, but it means it won't be easy.

Especially not when TikTok is gaining so much attention.

TikTok is on fire for a whole bunch of reasons, and the one I see as being most important, revenue, is on the list. In this case, I'm referring to in-app revenue, meaning TikTok's internal currency users of the platform purchase so they can reward creators.

On the App Store, the app has been creeping up the top-grossing charts very aggressively over the last few months, which I covered a few times, but this week it finally broke the top 10.

That's a serious milestone!

The top 10 grossing apps in the App Store split into two segments. The apps and games that pop in for a day or two when something big happens within their ecosystems, and the incumbents. ESPN and a few games fall into the first category, while YouTube and Tinder fall into the latter.

Which will TikTok fall into? Looking at revenue growth in the U.S. App Store, the answer is very clear.

Between January and September of this year, TikTok's in-app revenue in the U.S. grew 232% to an estimated $20M of net revenue, that's after Apple and Google take their fees. We estimate that this month, October, will be TikTok's most massive to date, with a haul of more than $24M of net revenue.

That's great news for creators who are getting the lion's share of this total and bad news for YouTube, which hasn't left the top 5 list in too long to count. Those days might be coming to an end. At TikTok's current ~25% month-over-month growth rate, it'll outpace YouTube in just a few short months.

As we head into 2022, content is still king, which is why a large portion of the top-grossing apps are content apps. I don't expect that to change any time soon.

Another week and another acquisition that's shrinking the mobile ad market. This week it's ironSource, another ad network that recently went public, that's acquiring Tapjoy, one of the first ad networks.

Like last week, I took a closer look at our SDK Intelligence (via Explorer) to see who's using ironSource and Tapjoy. What I saw pretty quickly was an interesting pattern. Many of the apps that have the Tapjoy SDK also have the ironSource SDK installed.

Let's have a look at the numbers:

ironSource is significantly larger than Tapjoy, but about 34% of apps that use ironSource also use Tapjoy. I wonder if that was a consideration during the acquisition talks. While it means ironSource's footprint won't grow as much, it does mean that for developers, the transition may be smoother.

In more absolute numbers, ironSource publisher pool will grow to 79K apps and games, mainly on the Android side of the fence. Notable shared users of both include big names like Voodoo, Miniclip, and Imangi. Some or all of their games have both SDKs installed.

I looked through the list of "new" names that will be coming over, but there weren't too many big names you'd recognize.

Like the MoPub acquisition, the multiple here was also around 5x, which sounds lower than it would have been a few years ago. Yet another example of how App Tracking Transparency continues to take its toll on the industry.

Question: If you're currently monetizing with ads, have you considered changing models?

I use app downloads as a proxy for retail sales somewhat often because some devices must be operated via app. An area where that's very useful is voice assistants, a market dominated by Google and Amazon.

Well, that's changing.

The holiday season is the biggest, by far, for Google Home and Alexa, and in previous years there has been consistent year over year growth. In getting ready to forecast this season, I noticed the trend stopped in 2020. But not across the board.

Downloads of both the Google Home app and Alexa app during the month of December have grown consistently since 2017. The pair grew 42% in 2018 and 20% in 2019. That slowed down in 2020 with a decrease of 11%.

Are we all done telling devices to set timers and turn off our lights?

Not so fast. When we split the data by platform, the App Store vs. Google Play, the trends diverge considerably. Growth on Google Play actually continued just as previous years indicated, 13% to be specific. It's downloads from iPhones that dropped by nearly a half in 2020.

Apple's HomePod mini was released in November of 2020, and at a price point that's much more reasonable than its older sibling, it's not difficult to see why it would capture so much attention from iPhone holders. Between the allure of an Apple device, its sleek look, and the claims of privacy Apple makes, I'm surprised Amazon and Google only saw a 50% decrease.

This year they'd likely learn and be more aggressive in pushing their devices, so I expect early discounts. Regardless, Apple now has a horse in this race, and the impact is very clear.