How to Invest in Mobile Apps

What are the most popular mobile apps?

How can investors successfully leverage the exponential growth seen in mobile apps? Looking at the top-downloaded and top-grossing apps gives an indication of what consumers value in an app.

Statista data shows gaming apps account for 12.68 percent of app downloads in the App Store, followed by business apps at 10.35 percent and education apps at 9.79 percent. Gaming is also the most-downloaded app category for the Google Play Store at 13.8 percent; education and business clock in at 10.47 and 7.11 percent, respectively.

In terms of revenue, four of the 10 top-grossing apps in the App Store in the US as of January 2024 were gaming apps Monopoly GO!, Royal Match, Candy Crush Saga and Roblox. The other six were popular dating app Tinder, entertainment apps YouTube and TikTok, along with streaming apps HBO Max, Disney+ and Paramount+.

The 10 top-grossing Android apps in the US were the gaming apps Monopoly GO!, Royal Match, Candy Crush Saga, Coin Master and Roblox, along with TikTok, Disney+, HBO Max, Google One and Peacock TV.

In 2023, TikTok became the first app to reach US$10 billion in global consumer spending, and research firm data.ai is predicting that figure will reach an impressive US$15 billion in 2024.

Artificial intelligence (AI) chatbots and media-based social platforms experienced significant user growth in 2023, and that trend is expected to continue in 2024, according to data.ai's 2024 State of Mobile report.

"2024 will see consumers demand authenticity, video-first content, and control of their social media experiences through the power of a dollar. Next year will unleash the next wave of innovation in AI and cement how we consume content," said Lexi Sydow, head of insights at data.ai. Other mobile app trends that data.ai is forecasting for 2024 include a rebound in gaming after a two year decline; increased downloads and functionality for generative AI apps; and more revenue-generating in-app purchases in social media apps.

In terms of demographics, Forbes notes that Gen Z (those between the ages of 10 and 25) represents nearly 40 percent of mobile app users, with the majority of that usage focused on video content. Millennials (ages 26 to 40) are the most diverse app users, with a full repertoire of social media, music streaming, games and e-commerce apps. Gen X (ages 41 to 56) goes online for a specific purpose, mainly for social interaction on social media platforms such as Facebook. Lastly, Baby Boomers (ages 57 to 75) are turning largely to apps focused on shopping, health and travel.

How to invest in mobile apps?

The statistics above clearly show consumer enthusiasm for mobile apps across all age segments. But there’s another demographic with a growing interest in this tech sector: investors.

Grand View Research expects the global mobile app market to grow at a compound annual growth rate of 14.3 percent from 2024 to 2030, reaching a value of US$567.19 billion by 2030. The main drivers of this growth will be increased adoption of mobile devices amid a rise in consumers making purchases via e-commerce channels. Other major factors driving growth will be continuous innovations in gaming apps, as well as increasing revenue from in-app purchases.

With this expansive growth in the market, investors have access to a wide variety of mobile app stocks to choose from, especially in the burgeoning gaming, social media and fintech arenas.

Outside of Apple, Microsoft (NASDAQ:MSFT) and Google, other top mobile gaming stocks include Tencent Holdings (OTC Pink:TCEHY,HKEX:0700), Qualcomm (NASDAQ:QCOM), Electronic Arts (NASDAQ:EA) and Roblox (NYSE:RBLX).

In terms of social media apps, Meta Platforms (NASDAQ:META) and Snapchat (NYSE:SNAP) offer investors a way into the market. And on the fintech side, a few stocks worth investor attention include PayPal (NASDAQ:PYPL), Block (NYSE:SQ) (formerly Square) and Mogo (TSX:MOGO).

Of course, diversification helps reduce the risk of volatility from single stocks. With that in mind, exchange-traded funds (ETFs) are often a good option for investors who don’t want to go all in on one company.

Mobile app ETFs for investor consideration include:

• Wedbush ETFMG Video Game Tech ETF (ARCA:GAMR)
• ETFMG Prime Mobile Payments ETF (ARCA:IPAY)

Overall internet-based ETFs that can provide exposure to mobile apps include:

• First Trust Dow Jones Internet Index Fund (ARCA:FDN)
• KraneShares CSI China Internet ETF (ARCA:KWEB)
• PowerShares NASDAQ Internet Portfolio ETF (NASDAQ:PNQI)
• Emerging Markets Internet & eCommerce ETF (ARCA:EMQQ)