This Week in Apps - 2023 Will Be Big

This Week in Apps is a short, no-fluff, round-up of interesting things that happened in the mobile industry. Here are our top highlights.

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U.S. Revenue Index (YoY)

Insights

1. Who's Still Downloading Facebook?

Is Facebook still a thing? If I had a penny for every time someone asked me that I'd be a lot of pennies richer...

But the joke is on them because not only was Facebook one of the most downloaded apps in 2022, it also made its way into more than 500 million mobile devices worldwide in the last 12 months.

That's half a billion people who chose to download the Facebook app.

Yes, Facebook is still a thing.

But... where is all this growth coming from?

Short and simple answer - India.

Just like sibling Instagram, Facebook sees a majority of its growth from India. We estimate that in 2022, India was responsible for more than 136M new downloads, most of which, through Google Play.

A look at the top 10 countries, which in total, were responsible for 70% of all new downloads, shows Indonesia, the US, Brazil, and Mexico as the top 5. Together, the top 5 add up to more than 50% of all new downloads.

Although Facebook had a rocky year, its stock is finally starting to pick up which many believe isn't going to stop. If downloads are in any way a proxy, there's some hope for Facebook in 2023.

Especially if TikTok gets banned in more countries. We'll have to see about that.

2. Bumble and Hinge See Strong Growth in 2022, but Tinder is Hard to Beat

It's no longer a question - dating has fully moved in-app. Much like shopping and even fitness.

Tinder has seen amazing growth over the last few years, but 2022 was a bit different.

I analyzed the revenue of Tinder, Bumble, and Hinge, the highest-earning dating apps in the US, over the last few years and the competition is stiff!

While Tinder was the highest-earning dating app in the world in 2022, its monthly revenue didn't grow. In fact, our estimates show monthly net revenue went down by 14%.

That's the exact opposite of the trend from the previous year.

If you ignore the competition, it's easy to attribute the decline in revenue to things going "back to normal" and people meeting IRL vs. by app, as well as to the economic situation.

But then I looked at competitors, and it's clear the decline Tinder is seeing is more likely the result of a shift to competitors.

Bumble, Tinder's chief rival and one of the few dating apps not owned by the Match Group, saw revenue grow by 18% in 2022. Absolute cash in the bank is lower than Tinder's haul, but the gap is shrinking. In 2021, Bumble was earning roughly a third of what Tinder was earning. In 2022, that number shrunk to less than half.

Hinge, which is a part of the Match group and a sibling to Tinder, saw the most revenue growth in 2022. Between January and December, Hinge's revenue grew a whopping 43%. In absolute terms, Hinge's revenue is a fraction of Tinder's, but this growth is pushing it in the right direction for a nice 2023.

So, here's an obvious question - is Tinder the Facebook of dating apps?

3. Chrome Dominates Mobile Browsing Market with 48% Growth in 2022

Browsers, especially on mobile devices, are pretty boring. There's Safari on iPhone and Chrome on Android. Right?

Not exactly...

I rounded up the most popular mobile browsers for iPhone and discovered a trend I didn't exactly expect.

Why ignore Android? Simple - you can download Google's default browser on iOS but you can't download Apple's default browser on Android, making the comparison difficult. So I'm focusing on Apple here.

Chrome was the most downloaded mobile browser among iPhones in 2022. Again, yawn, but! It's not that it's the most popular, it's how big Chrome is on iPhones!

According to our estimates, in 2022, Chrome made its way into 88M iPhones worldwide. The nearest competitor, Microsoft Edge, saw just 9M downloads in the year, about a tenth.

Firefox, which came in third, added a little under 7M downloads, according to our estimates.

And here's what I find interesting. When compared to 2021, Chrome's downloads grew by 48%. That's while its competition saw the opposite trend. So it's not that iPhone owners are looking for a replacement browser but rather that iPhone users desire Chrome.

Chrome's ubiquity is a result of its simplicity, but if you think about the browser as an interface for a search engine, things change.

As Microsoft prepares Bing for evolution with AI, I expect to see more investment in Edge as well as heavy promotion, likely through Apple's own ad network. And if successful, which is still an "if" and not a "when", that could spell trouble for Google's ad empire from a not-so-expected direction.

4. Headspace & Calm Forgo Downloads for Revenue in 2022

Meditation apps are a very interesting area to analyze. Before the pandemic, Calm, the most popular meditation app, saw downloads growing at a very healthy rate. Headspace, the runner-up, had the exact opposite trend with demand shrinking year over year.

Two similar apps, two very different demand patterns.

But then the pandemic hit and things got... weird.

You'd expect demand for meditation apps to rise during extra-stressful times. That happened for Calm, but only for a short amount of time. It didn't really happen for Headspace.

Since 2020, downloads have been on the decline for both. By 2021, Calm's downloads had dropped roughly 20% and Headspace 10%. In 2022, downloads dropped by 40%.

But where downloads seem to signal the end, revenue tells a much different story.

The gist - Calm and Headspace earned the most in 2022!

Even though demand declined, revenue per download increased as more people were ready to (finally) pay for destressing. That's what changed during the pandemic.

Looking at the data, Calm was ready for this shift. Its net revenue, according to our estimates, has been on the rise. It grew 14% in 2021, giving Calm nearly $80M of net revenue for the year. Headspace's revenue also grew by double digits -- 13% for a total of $53M. And that net, meaning after Apple and Google take their fees.

Looking at the trend, we can call 2021 a practice run for growth, because in 2022 the numbers were even higher.

Calm grew 57% and Headspace 59%. Wow!

If you're a developer who believes the only way to increase revenue is by getting more downloads you're only partially correct. Conversion rate, price, and retention rate (or churn), are the three most important metrics for you to optimize.

Are you optimizing them?

5. Is the Ride Over for Lensa AI (and AI-Generated Art)?

AI-generated avatars got red hot for about a month, an end-of-year "gift". At the center of this was Lensa AI, a not-new app that converts your plain selfies into exciting avatars for a small fee.

Viral successes aren't new to the App Store. 2022 was full of those. But unlike the rest, this trend lasted longer and also cascaded to other similar apps.

How much money does being extra viral earn?

According to our estimates, $37,500,000 of net revenue.

I didn't add an extra 0 in there - We estimate that Lensa AI brought in more than $37M of net revenue, meaning after Apple and Google take their fees, in the last 60 days.

At its peak, Lensa raked more than $2M in a single day, and again, that's net, meaning after fees.

It should come as no surprise that the majority of revenue, roughly 91%, came from iPhone owners. It's pretty much the same pattern we've seen all year long, but a bit more extreme in the App Store direction.

Although Lensa's run seems to be over, the app is still earning about 5x per day when compared to November. Not at all bad.

I'll leave you with this - Lensa wasn't the first, last, or even best app for AI-generated avatars. But it was there, and while it succeeded so did many other apps who were there. If you have an idea or even if your app already exists, don't leave it alone. Make sure it's ready for the next viral success.

* Download and revenue figures are estimated unless specified otherwise. App Store figures only include downloads and revenue generated from iPhones.

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All figures included in this report are estimated. Unless specified otherwise, estimated revenue is always net, meaning it's the amount the developer earned after Apple and Google took their fee.