Only 33% of US Mobile Users Will Pay for Apps This Year - eMarketer

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Only 33% of US Mobile Users Will Pay for Apps This Year

Tablet users are more likely than smartphone users to buy apps

February 5, 2015

Put a dollar sign in front of an app, and the number of people who are willing to download and install it drops dramatically. According to a new forecast from eMarketer, 80.1 million US consumers will pay for mobile apps at least once this year, representing only 33.3% of all mobile users.

US Mobile App Buyers and Penetration, by Device, 2013-2018

The total figure is inclusive of feature phones, which depresses the overall penetration rate. However, a minority of consumers among both the smartphone and tablet user groups will pay for and install apps on their devices this year. Only 35.8% of all US smartphone users will purchase apps in 2015, totaling 65.2 million people. Tablet users are much more likely than smartphone users to buy apps for their devices, and eMarketer estimates that 44.0% of all US tablet users, or 60.9 million people, will purchase apps for download and installation on those devices this year.

“The preference for free, ad-supported apps is rising among mobile users, and the share of smartphone and tablet users who pay for apps will actually tick downward over the next four years, despite the continued growth in the number of smartphone and tablet users and the number of app users overall,” said Cathy Boyle, senior mobile analyst at eMarketer.

It’s not only waning demand that’s depressing the market for mobile app purchases; supply is also in decline. Since apps are perceived as a cost center by some smartphone users, developers cognizant of consumers’ preference for free apps have been steadily moving away from the pay-to-download model in order to attract a larger base of users. Paid apps can and do attract a sizeable and loyal audience—some in the productivity, business and navigation categories, for example—but that is a declining percentage of the marketplace.

US Mobile App Installers and Penetration, by Device, 2013-2018

Furthermore, many developers have tested the paid download model against the various iterations of the free model—namely in-app purchases, subscriptions and in-app advertising—and on the whole, they’ve found the latter approach to be more lucrative.

Of course, the fact that a majority of mobile users don’t want to pay for apps doesn’t mean they’re not installing them. eMarketer estimates that nearly 93% of US smartphone users will download and install at least one app this year, and more than 90% of tablet users will do so.

eMarketer bases all of its forecasts on a multipronged approach that focuses on both worldwide and local trends in the economy, technology and population, along with company-, product-, country- and demographic-specific trends, and trends in specific consumer behaviors. We analyze quantitative and qualitative data from a variety of research firms, government agencies, media outlets and company reports, weighting each piece of information based on methodology and soundness.

In addition, every element of each eMarketer forecast fits within the larger matrix of all its forecasts, with the same assumptions and general framework used to project figures in a wide variety of areas. Regular re-evaluation of each forecast means those assumptions and framework are constantly updated to reflect new market developments and other trends.

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