The State of Play: A look at the growth of Google Play

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This report is powered by App Annie Intelligence The most accurate market data available for the app stores appannie.com/intelligence

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Apps, downloads and revenue. Google Play’s phenomenal growth over the last year.

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Publishers are launching an increasing number of apps on Google Play Number of live apps on Google Play

Google announced that Google Play surpassed 1 million apps

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2013 2013 2013 2013 2013 2013 2014 2014 2014 2014 2014 2014

•  There are now over 1.5 million apps available on Google Play •  The number of apps grew by around 60% between July 2013 and June 2014

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The worldwide market for Google Play downloads continues to grow rapidly

Indexed Downloads

200

Worldwide quarterly Google Play app downloads

150

1.5x

year on year

100 50 0 Q1 2013

Q3 2013

Q1 2014

•  Quarterly app downloads from Google Play grew approximately 50% from Q1 2013 to Q1 2014

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Revenue is soaring, outpacing download growth 300

Worldwide quarterly Google Play app revenue

Indexed Revenue

250

2.4x

200

year on year

150 100 50 0 Q1 2013

Q3 2013

Q1 2014

•  Google Play quarterly app revenue more than doubled from Q1 2013 to Q1 2014

Growth in Google Play downloads and revenue presents an expanding opportunity for app publishers Confidential - Property of App Annie. Do not distribute. ©2014 App Annie

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Worldwide opportunities. Google Play has expanded rapidly across a range of markets over the past year.

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Advancing economies are leading download growth among Google Play’s top markets Indexed Downloads

150

Quarterly Google Play app downloads by country Top 5 countries by Q1 2014 downloads

100

1.2x growth

50

2.6x growth

1.9x

1.0x

growth

growth

1.5x growth

0 United States

Brazil Q1 2013

Russia

South Korea

India

Q1 2014

•  All the largest Google Play markets experienced growth in the past year •  Brazil made significant gains to become the second largest market for Google Play downloads Confidential - Property of App Annie. Do not distribute. ©2014 App Annie

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Established markets are experiencing phenomenal growth in revenue Quarterly Google Play app revenue by country Indexed Revenue

250 200

Top 5 countries by Q1 2014 revenue 2.4x growth

150 2.6x

100

growth

1.9x growth

50 3.5x

0 Japan

United States

South Korea

Germany

Q1 2013

2.4x United Kingdom

Q1 2014

•  Japan continues to dominate Google Play revenue •  After trailing South Korea since Q1 2013, growth in the United States propelled it back to second position for Google Play revenue in Q1 2014 Confidential - Property of App Annie. Do not distribute. ©2014 App Annie

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Rapidly emerging markets offer new opportunities for publishers Google Play App Downloads

Google Play App Revenue

Rank Q1 2014

Country

Rank Change vs. Q1 2013

Country

Rank Change vs. Q1 2013

1

United States

-

Japan

-

2

Brazil

+5

United States

+1

3

Russia

+1

South Korea

-1

4

South Korea

-2

Germany

+1

5

India

-2

United Kingdom

-1

6

Mexico

+2

Taiwan

N/A*

7

Turkey

+10

France

-1

8

Germany

-2

Hong Kong

+2

9

Indonesia

+7

Australia

-2

10

Japan

-5

Russia

-1

* Paid apps returned to Google Play in Taiwan in February 2013

•  Brazil, Mexico, Turkey and Indonesia experienced phenomenal growth in downloads, driving them up the rankings •  Taiwan and Hong Kong showed significant potential for generating Google Play revenue Confidential - Property of App Annie. Do not distribute. ©2014 App Annie

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Category growth. Games dominate Google Play, but opportunities outside of Games are expanding.

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Games accelerate Google Play revenue growth 300

Worldwide quarterly Google Play app downloads

150

Indexed Revenue

Indexed Downloads

200

100 50 0

Worldwide quarterly Google Play app revenue

200

100

0 Q1 2013 Apps outside of Games

Q1 2014 Games

Q1 2013 Apps outside of Games

Q1 2014 Games

•  In Q1 2014, Games accounted for almost 90% of Google Play app revenue, up from around 80% in Q1 2013 •  Apps outside of Games provided about 60% of Google Play app downloads in Q1 2014 Confidential - Property of App Annie. Do not distribute. ©2014 App Annie

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Although Games dominate revenue gains,

growth is almost universal across categories 250

Quarterly Google Play download and revenue growth by category Top 6 categories outside of Games by downloads, Q1 2014

Indexed Revenue

200

Q1 2013

Communication

Q1 2014

150

Social

100 Music & Audio

Tools Entertainment

50 Photography

0 0

20

40

60

80

100

120

140

160

180

Indexed Downloads •  Messaging apps supported high revenue growth for Communication and Social •  Tools and Communication categories displayed particularly rapid download growth Confidential - Property of App Annie. Do not distribute. ©2014 App Annie

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Freemium on the rise. The freemium business model continues to grow across Google Play.

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Freemium continues to grow in downloads and revenue Worldwide monthly Google Play downloads

Worldwide monthly Google Play revenue

100%

100%

80%

80%

60%

60%

40%

40%

20%

20%

0%

0% May 2013

May 2013

May 2014 Freemium

Free

Paid

May 2014

Paid with In-App Purchases

•  Freemium apps contributed almost half of Google Play downloads in May 2014 •  Revenue from freemium apps grew to around 98% of total worldwide Google Play revenue in May 2014 Confidential - Property of App Annie. Do not distribute. ©2014 App Annie

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Asian markets lead the way, but

freemium dominates all major markets Monthly Google Play app revenue by country, May 2014 South Korea Japan United States Russia Brazil 0%

20%

40%

Freemium

Paid

60%

80%

100%

Paid with In-App Purchases

•  Asian markets have a exceptionally high proportion of revenue from freemium apps •  Emerging Google Play markets such as Brazil, Mexico and Turkey tend to have a slightly lower proportion of revenue from freemium apps Confidential - Property of App Annie. Do not distribute. ©2014 App Annie

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Key Takeaways.

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Google Play’s worldwide growth is extending opportunities for app publishers •  An ever-increasing number of app publishers are utilizing Google Play –  There are now well over 1 million apps available on Google Play •  App downloads and revenue from Google Play increased dramatically over the past year –  Markets such as Brazil, Russia, Mexico, Turkey and Indonesia are driving growth in app downloads from Google Play –  Google Play is experiencing rapid expansion of monetization in established markets such as Japan, the United States and South Korea •  Games played a major role in the acceleration of Google Play revenue growth, but almost all app categories experienced expansion –  Games accounted for almost 90% of revenue in Q1 2014 •  The freemium business model advanced its domination of Google Play app revenue, and represents a growing proportion of downloads –  Asian markets lead the way in generating freemium revenue Confidential - Property of App Annie. Do not distribute. ©2014 App Annie

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Thank you.

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