How to Invest in Mobile Apps

Mobile Investing
cell phone lying on table with app icons floating above it
Lenka Horavova / Shutterstock

Mobile apps represent a wealth of opportunity for investors interested in technology stocks.

The ubiquity of mobile devices and their prominence in everyday life has led to the development of mobile apps for everything from gaming and dating to banking and stock trading.

Mobile apps began rising to prominence in 2007 with the launch of iPhone, which heralded a new era in connectivity brought about by revolutionary touch technology. The field has grown widely from thereon out, and the diversity of today’s offerings makes investing in mobile apps an appealing prospect.

With nearly 3 million apps in Google’s (NASDAQ:GOOGL) Google Play Store and nearly 2 million apps available in Apple’s (NASDAQ:APPL) App Store, there is no shortage of app choices for mobile devices.

There is also a huge number of people downloading these apps. According to DataReportal, there are 5.31 billion mobile phone users in the world. What’s more, Buildfire states that the average American engages with their phone every 5.5 minutes, with 88 percent of that time spent on mobile apps.

Here the Investing News Network provides insight on investing in mobile apps and tapping into the profit potential in this incredibly broad sector of the tech market.

How to invest in mobile apps: 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.

Information from Statista shows that gaming apps account for roughly 21 percent of app downloads in the App Store, followed by business apps at 10.7 percent and education apps at 8.7 percent. Gaming is also the most-downloaded app category for the Google Play Store, clocking in at about 13.7 percent; it’s followed by education at nearly 9.3 percent and business at nearly 7 percent.

In terms of revenue, a few of the top-grossing apps in the App Store in the US as of February 2022 were gaming apps Roblox and Candy Crush Saga, entertainment app Disney+, social media app TikTok and dating app Tinder. The top-grossing Android apps in the US at that time were the gaming apps Candy Crush Saga and Coin Master, along with entertainment app HBO Max and TikTok.

While gaming apps clearly dominate the mobile app industry, fintech apps are gaining market share too. According to research from App Annie, finance apps experienced a growth rate of 28 percent year-over-year in 2021 — perhaps to be expected given the surging popularity of neobanks.

Unsurprisingly, with the COVID-19 pandemic reshaping social life, TikTok has become the top contender in social media. App Annie notes that “live streaming is driving the social category,” with TikTok leading the way; notably, time spent on the popular app nearly doubled in 2021 outside of China.

Overall, App Annie’s research shows that consumers are spending more and more time using mobile apps on smart devices. Although this trend is multi-generational, Forbes reported that Gen Z (those between the ages of 10 to 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: Where to start

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.

Allied Market Research expects the global mobile app market to grow at a compound annual growth rate of 18.4 percent starting in 2019 to reach a value of US$407.31 billion by 2026. The main drivers of this growth, says the research firm, is the increased adoption of mobile devices amid a rise in consumers making purchases via e-commerce channels. Other major factors driving growth in this market are continuous innovations in gaming apps, as well as increasing revenue from in-app purchases.

With this expansive growth in the market, investors are blessed with a wide variety of mobile app stocks to choose from, especially in gaming, social media and fintech.

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

In terms of social media apps, Meta Platforms (NASDAQ:FB), Zoom (NASDAQ:ZM), Amazon’s (NASDAQ:AMZN) Twitch and Snapchat (NYSE:SNAP) offer investors a way into the market.

A few fintech stocks worth investor attention include PayPal (NASDAQ:PYPL), Block (NYSE:SQ) (formerly Square) and Mogo Finance Technology (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)

This is an updated version of an article first published by the Investing News Network in 2015.

Don’t forget to follow us @INN_Technology for real-time news updates!

Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article


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