2016 was marked by demonstrations of what augmented reality can do for us. According to app analytics company App Annie, next year should see augmented reality on the increase, together with an evolution in the content of mobile apps and new ways of distributing them. We take a look at what’s in store for 2017.

US$52 billion! That’s the staggering gross spend on mobile app stores for 2016 as a whole. And that doesn’t even include in-app advertising, which accounts for some US$77 billion for the whole year.

So 2016 has been a particularly good year for the mobile app economy. What have its highlights been?


Strong growth in sales

First of all, it’s difficult to overlook Pokémon Go, which brought augmented reality to consumer gaming, demonstrating its appeal and its ability to go viral. Companies are already trying to take advantage of Pokémon Go’s success and so augmented reality is finding its way into mobile applications. Sears, for example, has launched a mobile app that leverages this trend: it uses augmented reality to consolidate the relationship it has with its customers. (Read).

Downloads of productivity apps actually declined – despite the launch of the iPad Pro.

2017 also looks set to be a banner year: gross consumer spend on mobile app stores is predicted to rise to US$65 billion. Gross in-app advertising spend – according to App Annie – will even reach US$101 billion, with a substantial share of this revenue being driven by social media, video streaming platforms and games.


Videos and augmented reality driving m-commerce

So what does 2017 hold? App Annie has identified four major trends:

  1. Short-form video will explode on platforms such as YouTube, Facebook and Snapchat, giving terrestrial TV a run for its money.
  2. B2C messaging will grow, improving customer relations and “conversational commerce”.
  3. The way in which apps are distributed is changing: with Instant Apps, Android devices can access apps without requiring a download. Google is heavily backing this selective distribution model, promoting apps depending on the usage context: Google Maps features deep links to apps for traveling, accommodation and transport. The concept even involves sending purchasing app prompts when users are in the vicinity of a retail store.
  4. And the last area in which App Annie is predicting growth is – as we said at the start – augmented reality. The technology is particularly well-suited to mobile devices – because of their screen sizes, but also because of their technical specs (GPS, camera, etc.).

But there are a number of innovations that are going to have to wait a little longer for their moment in the sun. Voice-assisted technology remains niche, for example. Artificial Intelligence will need to develop a little further for voice agents to really make a difference.

And as far as wearables are concerned, App Annie doesn’t see smart watches quite living up to all the hype associated with their launch. Expectations are now shifting to eyewear – like Microsoft’s HoloLens – although the commercial impact of these products will most likely remain limited in 2017.