Covid19 has undoubtedly changed life in the short-term. The virus has spread and mutated quickly, leaving businesses, organisations and countries with little time to adapt, survive and thrive. We take a look at Covid19’s impact on the app industry in order to best prepare our audience and customers to survive, and even thrive in this dramatically changing environment. Startups, and the travel and ride-sharing vertical are hit hard during this pandemic. Foreseeably, whilst many brick and mortar businesses have been negatively impacted, the overall app vertical is weathering the storm well, with numerous verticals and apps even thriving.
We take a look at how TikTok has taken the traditional ‘television’ format, to increase viewership among their self-isolating market, how Zoom has risen and faced backlash among many other case studies. Whilst Zoom is a well-known example, it is an important reminder that no matter whether you’re in a positively affected vertical or not, there are major challenges presented by the Covid19 pandemic, that if no adequately prepared for, can either damage your business or hamper potential success during this period. We address those challenges that are universal to every vertical, and integral to resilience during this time of great ambiguity. Whilst the app industry has been very fortunate during this pandemic, it is important to note that some preliminary forecasts have been re-evaluated and are predicting that after the app surge, there will be a slightly less growth. For example, whilst Sensor Tower still predicts global consumer spending in mobile apps to grow to $171 billion by 2024 (over than double the $85 billion spent in 2019), this is a revised figure from their original projections, which were $3 billion (or 2%) higher, prior to the Covid19 outbreak.
- How are leaders around the world reacting to the CoronaVirus pandemic?
- Latest news from the mobile app industry
- How has the mobile app industry been affected?
- Which mobile app verticals were positively impacted by Covid-19?
- Which mobile app verticals are currently facing a crisis?
- Which mobile apps are used the most amid the Covid-19 lockdown
- The main challenge that the mobile app industry has to deal with
- How the Covid-19 can represent an opportunity for mobile businesses
How are Leaders Around the World Reacting to the CoronaVirus Pandemic?
According to a PwC survey that took place on the second week of April 2020, and included more than 800 CFOs across the globe:
- The vast majority (73%) of CFO expresses a high-level of concern for the potential repercussions that the Covid-19 might have on their businesses;
- 45% of them (so far) plans on taking advantage of government support programs, which are now being distributed across the globe to support all of the small businesses who have been negatively impacted by the virus;
- 77% of the interviewed strongly consider the implementation of cost-containment practices as their main response to Covid-19.
The virus has caught many of them off guard. However, in stark contrast with the figures shown above, 56% of the interviewed expects, should the pandemic end today, to get back to a “business-as-usual” setting within a 3-month period.
Latest News from the Mobile App Industry
The state of apps during the Coronavirus, as imaginable, has been highly influenced by the global pandemic itself. However, as many apps are experiencing unheard-of increase in downloads and overall engagement levels, others are just scraping by, wishing to see the end of the tunnel in a not-so-distant future. On a general level, the latest happenings within the mobile industry are the followings:
Almost all the major mobile app events got canceled
The first unpleasant consequence of the Covid-19 outbreak is the cancellation of some of the most-anticipated mobile events of 2020, such as the App Growth Summit, the Android Makers, and the Mobile Growth Summit. Some of them will take place digitally (only for this year): it is the case, for instance, of the Worldwide Developers Conference, one of Apple’s biggest events of the year. According to Phil Schiller, Apple’s Senior VP of worldwide marketing: “The current health situation has required that we create a new WWDC 2020 format that delivers a full program with an online keynote and sessions, offering a great learning experience for our entire developer community, all around the world.” Apple’s WWDC is expected to take place “sometime in June”.
Google and Apple are crafting a contact tracing system in order to prevent Covid-19 spread
As reported by TheVerge, Google and Apple are coming up with a contact-tracing system designed for iOS and Android-powered devices, in order to “help users prevent spreading the novel CoronaVirus by figuring out who has had contact with infected patients.” In short, if someone contracts Covid-19 (or any “new virus”), the system adopts counteractive measures in order to contain it, such as tracking down and quarantining not only the one who got infected, but also everyone who has been in contact with that person. In scenarios like the one we are experiencing right now, this could dramatically help in containing the overall number of infections, therefore limiting the outbreak’s diffusion. As for the “how”, Apple and Google are working on integrating a Bluetooth-based contact tracing into each phone’s operating system.
Mobile 5G is becoming a reality
5G networks are the next frontier of mobile Internet connectivity. 5G is expanding worldwide, making mobile connections as seamless and fast as they have ever been. Among its main benefits, there are:
- As mentioned, faster connections and download speed (expected to hit 20Gbps downlink and 10Gbps uplink per mobile base station);
- High-quality video streaming and conferences;
- More reliable mobile connections.
5G is quickly and steadily replacing (or, in some cases, augmenting) 4G and LTE connections. However, if you’d like to take advantage of it, you’ll need both a mobile phone that supports 5G and a network that offers it. At the time of this writing, 5G Ultra Wideband is currently available in select areas of more than 31 American cities, and is continuing to expand both within and outside the US.
How was the Mobile App Industry Affected?
Among the top trends within the mobile app industry, there are some interesting and worthy-of-note statistics. According to a recent report by AppsFlyer, on a global scale:
- Apps’ usage rate (now at 18.18%) has slightly increased since the end of February (15.01%);
- The same happened for non-organic installs, which now stand at 18.37% after the 14.49% registered within week 1 of the pandemic;
- The most incredible change, however, was represented by the number of organic downloads. After a flat line that lasted until about mid-February, an impressive 15%-growth took place.
As people get to spend more time at home, they inevitably turn on their phones. Besides giving a slight hint about the effectiveness of the widespread social distancing practices, these numbers also suggest how people, nowadays, are increasingly adopting mobile devices as their main windows to the world. As we will further outline, however, stats don’t tell the whole story, especially when it comes to specific mobile niches.
Which Mobile App Verticals were Positively Impacted by Covid-19?
The beautiful thing about the mobile ecosystem is that it is one of the most accurate predictors of market demand. At any point in time, just by looking at mobile app trends, you’ll get valuable glimpses and insights about what the global marketplace appreciates and demands the most and what, on the other hand, will not have much success moving forward. With that said, the impact that Covid-19 has had on the mobile app industry was one to remember. While some verticals took advantage of the widespread adoption of social distancing practices to further cultivate a steady online presence and reap major rewards, some of them inevitably got shut down or heavily damaged, mostly because of either their business models or their poorly-executed digital strategies, most of which rely predominantly on physical interactions (and are therefore not suitable to the digitalized world we live in). Among the thriving verticals, there are:
In an attempt to kill boredom and wait for the lockdown to pass, many consumers have had in games their primary source of entertainment. According to App Annie, In the week starting the 23rd of February, the average number of weekly game downloads in South Korea was up by 35% compared to the 2019 weekly average, exceeding 15 Million downloads during that same week (it was a 25% improvement compared to January 2020).
As we shift our focus towards Europe, the same trend prevails: March 2020 saw a record 19% increase in installs from February and about 14% from January (just to get some perspective, games downloads registered a 9% increase between February and March 2019, and a 9% decrease between January and March 2019). The amazing number of downloads, however, didn’t automatically translate into bigger revenue, even though the overall earnings within the niche did grow considerably throughout this past month.
The restrictions imposed by the CoronaVirus have also resulted in the surge of online business meetings and smart-working practices. During the first half of February 2020, Business and Education apps were downloaded at levels roughly 2x the weekly average in 2019. In Italy, during the first week of March, the number of overall business apps downloaded between iOS and Google Play exceeded the 700k-quota (761,000), making it the best week ever for the business app category. Among the most downloaded apps, there is Google Zoom, the free video-conferencing tool that is helping thousands of businesses in coping with the lack of face-to-face working relationships.
Lastly, among the most profitable and thriving niches of these last couple of months, there is the social media space, which is now being used not only for plain entertainment and communication purposes, but also for seeking out news and updates about the virus.
Among all the social media platforms we know, two in particular are adopting proactive behaviors in regard to Covid-19: LinkedIn and TikTok.
- From a business standpoint, LinkedIn is taking advantage of these troubled times by educating business owners about smart-working best practices and high-quality and contextual content production, and one way to reach that is through unlocking its 16 LinkedIn Learning courses, which are now accessible for free by any user on the platform;
- TikTok, on the other hand, is serving its customer base not only through entertainment, but also education (we’ll see how in the next couple of paragraphs).
Which Mobile App Verticals are Currently Facing a Crisis?
If some verticals are getting peak engagement and rewards as a result of this crisis, there are some other mobile apps and niches that are not nearly as strong, and with the fallout of this pandemic, are now sailing in troubled waters, to say the least. We are referring to two verticals in particular:
The CoronaVirus has severely impacted the mobile travel app niche. According to Statista, it is estimated that global revenue for the travel and tourism industry will drop by 17% in 2020, with Asia that is likely to experience the greatest employment loss rate in the entire industry.
These numbers are inevitably falling on the mobile travel app vertical, which came across a staggering 52.8% reduction in the number of overall installs, following the Coronavirus’ restrictions. If the pandemic continues for several more months, the World Travel and Tourism Council, the trade group representing major global travel companies, projects a global loss of 75 million jobs and $2.1 trillion in total revenue.
Another victim of the Covid-19 has been the ride-sharing vertical, which saw the pandemic wreak havoc in most countries. The largest impact, however, has been perceived in China and France. China saw weekly downloads of Didi fall 75% from the highest week to its lowest week in the period analyzed (from January 29th, 2019 through March 7th, 2020). In this exact same time span, France saw weekly downloads of BlaBlaCar fall 65%. Other countries, such as UK and US, did experience a decline, although not as severe as the one we have outlined.
Interestingly, although many are turning to digital and app-based forms of exercise and sports routines, Sensor Tower recorded a 25.1% decrease in the sports vertical during the Covid19 pandemic. However, this is not the case for numerous sport based apps, that have seen an increase in their user base and in-app engagement.
According to MarketWatch, Daily Burn, an app that provides workout and nutrition programs experienced a 268% year-over-year increase in new members in the week ending March 27, 2020. The Yoga app Down Dog has over 400,000 new users that signed up for free memberships in the past two weeks (ending March 27, 2020), of which 100,000 came from Spain, Italy and France, the European countries that are most affected by COVID-19. Additionally, Nike reported that its workout app’s weekly active users in China grew 80% by the end of the quarter (while people were isolated at home) when comparing with the beginning of the quarter.
Which Mobile Apps are Used the Most Amid the Covid-19 Lockdown?
Throughout these uncommon times, there are certain apps that, in perfect reflection with the change in consumer behavior due to the Coronavirus outbreak, are getting more traction than others. Among the ones who got the most user sessions and overall engagement, there are:
Houseparty is a video chat application acquired by Epic Games in 2019. Representing one of the best ways to keep interacting with friends and loved ones, Houseparty made a record of $50MM worth of sign-ups within the last couple of weeks alone (of course, worldwide lockdowns played a huge role in that), becoming the biggest social media app on the market as it pertains to number of downloads. Although Houseparty was already leveraging a significant number of eyeballs prior to the outbreak, it has now reached its peak, and is ready to be considered a challenger within the social media app sphere.
With downloads in more than 150 countries and over 1B of total users, it’s no surprise that TikTok is one of the most used apps amid the Covid-19 pandemic. Through the hashtag #coronavirus (which gathered around 54.5B views within the videos it was part of), the app’s user base is finding a way to cope with worldwide lockdowns, making it one of the most prominent globally. Besides the impressive numbers, TikTok is also taking proactive measures, and it is doing so by working closely with the World Health Organization (WHO) in order to educate people about the virus and push back against the spread of misinformation.
As it pertains to the top viewed and downloaded mobile apps conversation, Google Zoom was probably a foregone conclusion. As companies and schools move to smart working (and smart learning), Google Zoom has quickly become the go-to choice for business owners who are looking for an easy, free, and alternative way to maintain their working relationships. According to TechCrunch, during the week of March 15-21, ZOOM Cloud Meetings was downloaded 14x more than the weekly average during Q4 2019 in the US, 20x more in the UK, 22x more in France, 17x more in Germany, 27x more in Spain and an impressive 55x more in Italy.
The Main Challenges the Mobile App Industry Must Overcome
Despite the fact that the mobile app niche, as a whole, is doing just fine, the repercussions of the Covid-19 has many mobile app businesses on the ropes. Amongst the main challenges that mobile businesses are facing, we outline an increased number of layoffs, users that are turning their heads towards desktops, and rising ad costs.
Layoffs has probably proven to be the main challenge, both for entirely mobile-based businesses and firms that spend a lot of their resources on optimizing their mobile app presence. Emblematic has been the situation of Bird, the micromobility company that laid off 406 of its employees in just 2 minutes via a Zoom webinar. The same procedure was adopted by TripActions, a corporate travel startup that fired almost one third of its workforce within the last week of March. According to the New York Times, more than 50 start-ups have cut or furloughed roughly 6,000 employees in recent weeks, and very few sectors seem immune to this phenomenon. Cut spendings is being the most efficient ways for affected companies to survive, but it is not the only thing. Along with firing employees, most businesses find themselves forced to slash prices, renegotiate fixed costs, and, as we have pointed out before, ask the government for assistance.
Amid the CoronaVirus pandemic, being able to ensure trusted and transparent information is a priority for every single source of information. The bigger number of eyeballs that are overcrowding the Internet nowadays has caught the attention of fraudsters, and that explains why, during the first quarter of 2020, fraudulent installs jumped 16% month-on-month. Fake coronavirus news can disrupt the already-shaky mental attitude of the millions of people that, either directly or indirectly, are suffering from the Covid-19’s repercussions. In order to limit the spread of misinformation, the Italian news agency ANSA is partnering with EY Advisory S.p.A (EY), a unique news tracking system based on blockchain technology, in an effort to strengthen bonds of trust between its organization and its readers and customers, using blockchain technology that shows the source of news. The blockchain application for the publishing industry will allow organizations to produce and distribute digital content in a reliable and secure way, further increasing the relationship of trust with readers. In short, thanks to the ANSAcheck news tracking label, readers can trace the history and source of each news item.
How Covid-19 can Represent an Opportunity for Mobile Businesses
If the virus has presented most mobile verticals with seemingly insurmountable challenges, it is giving to leaders and CEOs across the board the opportunity to do something, to adopt a different view, and, most of all, to be proactive. Desperate times call for desperate measures, and even though many mobile businesses keep on losing money, they’re not standing still.
Protecting employees is not an option
Now more than ever, it’s essential for every single company to take care of its workforce. We saw the measures, for example, that Uber and Lyft adopted with its independent contractors. Other brands are following suit. Promoting employee security and health should be every brand’s top priority, as of now, and according to the World Economic Forum, Microsoft has agreed to keep paying regular wages to the hourly workers who support their campus, even if hours reduce. UK supermarket Morrisons has just launched a hardship fund for employees facing difficulties as a result of the virus.
Refine your communication
If your business has taken a massive hit as a result of the Covid-19, that should not be enough for stopping you from doing what’s in your customers’ best interest. Apps for the hospitality industry, for instance, are engaging in a conscious effort to make people aware of the current situation and advising them not to travel, rather plan for the future. Users are also being rewarded with coupons and vouchers for their future plans. Even if such measures go against most companies’ bottom line, they can help in jumpstarting the economic recovery and therefore reduce the likelihood of this crisis being prolonged for an indefinite period of time. Communicating assiduously with your customers can also give you more authority in their eyes and generate more loyalty on their part, besides positioning your brand as one of the most proactives in the battle against CoronaVirus.
Demonstrate a genuine interest to help
“Most of the app development companies around the world are facing crumbling pressure. Clients from Fortune 500 brands to SMEs are incurring huge losses and could see no other option than to go into hiatus mode or terminate contracts.” said Sudeep Srivastava, co-founder and CEO of Appinventiv. However, as with all crises, there are opportunities that could be exploited by far-sighted and ambitious leaders. There are some companies, for example, that have been tragically hit by Covid-19, yet they are turning what looks like a negative situation into a positive one.
- Uber and Lyft, two of the most popular ride-sharing companies, are doing all they can to support their independent contractors. Both companies confirmed that they will support drivers and delivery people diagnosed with novel coronavirus or placed in quarantine by a public health authority , as reported by CNBC, for a period of 14 days;
- Food delivery are also adapting to the restrictions imposed by the virus. Uber Eats, among many, has brought a change in its style of operations. As reported by TechCrunch, the company has removed charging delivery fees from local restaurants in the US and Canada, along with expanding the number of convenience stores available via the app and introducing the “contactless delivery” as a measure that’s intended to shrink the health risks for couriers making deliveries (later adopted by most delivery brands around the world);
- Healthcare mobile apps, although for different reasons, are crumbling under the intense level of market demand, yet they are making an effort to educate people about how to keep themselves healthy and stress-free through free apps and resources;
- Luxury goods giant LVMH is producing hand sanitizer in its perfume factories, for use in French hospitals;
- Johnson & Johnson has donated a million surgical masks to Chinese health workers;
- IKEA is helping to kit-out hospitals in affected areas.
Companies that are taking a strong stand against Covid-19 not only do a favor to the entire world, but it’s likely that they’ll reap the biggest rewards when the crisis will (hopefully) be over. This virus is a test for most companies, as customers want to know not only how successful businesses react to the latest happenings, but also how flexible and helpful they manage to be during these tough times.
Final Thoughts on the State of Apps During COVID-19
Coronavirus has destroyed more businesses than the ones it has helped. Its impact was tragic across a variety of industries and most mobile verticals, even though some of them thrived upon it. No matter how long it will take for the situation to go back to “normal”, it will never be the same, and consumer behaviors will be deeply affected by the happenings that took place within the last couple of months. As of now, any business should see in helping the community (even if not necessarily on the same extent of Google and Apple’s tracing system), taking care of its “circle” of people and partners, and cutting losses its main priorities. We don’t know when Covid-19 will stop infecting people, nor when an effective vaccine will come out (even though, as stated by the BBC, we’re at least 12-18 months away from that); what we do know, however, is that if we are ever to get out of such troubling times, cooperation and working cohesively for the greater good are components that shouldn’t be taken for granted nor excluded at all.