Mobile AI: A Booming Market Surpassing One Billion Dollars

Generative artificial intelligence is transforming the mobile app industry, enhancing user convenience through smart assistants like ChatGPT and Apple Intelligence. This trend is expected to decrease mobile app usage by 25% by 2027. The market for AI applications is rapidly expanding, with revenues projected to reach $1.3 billion by 2024. While ChatGPT leads in global spending and downloads, many other AI apps are emerging, prompting developers to carefully integrate AI features to truly enhance user experiences.

Generative artificial intelligence is revolutionizing the mobile app landscape, much like its impact in other sectors. Smart assistants, whether built into devices by manufacturers or available as downloads, are becoming essential tools for users seeking convenience and efficiency.

Leading AI applications such as Apple Intelligence, ChatGPT, Google Gemini, Microsoft Copilot, and Claude AI offer a range of functionalities, from summarizing notes and drafting messages to editing images and creating unique wallpapers. As predicted by Gartner, this trend of “AI Gen inside” is projected to reduce mobile app usage by 25% by 2027. Why rely on a separate translation app when ChatGPT can seamlessly translate text in real time?

The emergence of this new class of virtual assistants is driving remarkable market growth, boasting an increase of 112%. This growth outpaces that of mobile gaming, social networking, streaming, and e-commerce. A report from mobile market experts Sensor Tower indicates that revenues from AI chatbots could reach approximately $1.3 billion by 2024, a significant jump from $455 million last year and just $30 million in 2022. Downloads are also soaring, with an estimated total of 1.5 billion by 2024, marking a 119% increase, including 32 million in France.

ChatGPT: The Leading App in Generative AI

The United States stands as the dominant market for generative AI applications, contributing 45% to global revenue. The United Kingdom follows with 4%, alongside Germany (4%), Japan (3%), and Canada (3%). However, in terms of downloads, countries such as India, Indonesia, China, Brazil, Mexico, and Vietnam are setting new records.

Despite the burgeoning market, chatbots have yet to dominate app store rankings. ChatGPT currently holds the 18th spot among the top 20 downloaded apps across all categories, trailing behind popular platforms like Instagram, Netflix, Temu, TikTok, and WhatsApp.

OpenAI’s ChatGPT is the frontrunner in the generative AI app category, capturing about 40% of global spending and 23% of downloads. Following closely are Google Gemini, Doubao from ByteDance, and Microsoft Copilot.

According to Sensor Tower, “there is still plenty of room for other players to emerge,” highlighting that sixteen generative AI applications have generated at least ten million dollars in revenue in 2024.

Navigating the “All AI” Hype

The surge in AI interest has sparked a rush among developers. Over the past two years, at least one hundred apps across productivity, photography, and education have incorporated terms like “AI” or “GPT” into their branding to capitalize on the trend. Meanwhile, established apps like Duolingo and Strava have integrated AI features without altering their original names.

When considering all iOS and Android apps that reference AI in their name, subtitle, or description, the total number of downloads could reach 17 billion by 2024, which represents around 13% of downloads across various categories.

However, Sensor Tower cautions developers against hastily incorporating AI solely for marketing appeal. They advise a thoughtful integration of technology that genuinely enhances user experience rather than merely offering minor upgrades to existing functionalities. The firm cites Duolingo’s 2023 AI enhancements, which users felt did not justify a price increase. In contrast, the introduction of AI-generated video calls in September, allowing users to engage in foreign language conversations with the app’s character, was met with positive responses.

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