User spending increases by more than 4000% on AI-powered apps
Given the growing interest in generative AI tools such as text-based ChatGPT and image-based Midjourney, AI-powered apps are growing in number and popularity in both app stores.
A report by analytics firm Apptopia suggests that 158 AI Chatbot apps – with the description having keywords like “AI Chat” or “AI Chatbot” – hit app stores in the first quarter of this year. This is a 1,480% year-over-year increase, primarily due to OpenAI publicly launches ChatGPT API in March.
The data suggests that several apps such as Nova AI, Genie AI, and Chat With Ask AI ranked in the top app store rankings. Many of these apps have the same name, so it’s easy to get confused between them. At the time of writing, Chat with Ask AI is on the list of top 10 free apps on iOS in several countries.
Apptopia mentions in the report that developers are trying to convert AI chatbot technology, which is readily available on a web browser, into a native mobile experience and charging money for it. Most of the time, these apps charge users for unlocking an unlimited number (or many) of conversations with the chatbot.
The analytics firm noted that downloads of AI-powered apps rose 1,506% year-over-year, with the number reaching nearly 20 million in March. Spending in the app also increased, reaching nearly $3 million in March, a massive 4184% year-over-year increase.
Data compiled by Bernstein and app analytics firm data.ai (formerly App Annie) paints a rosier picture. It indicates that user spending for the top 10 GPT-3 powered AI applications reached $6 million in February 2023.
Although most of these apps use the same core technology, they try to create differentiation by helping people with various prompts or introducing multiple versions of bots with different abilities or moods. For example, Quora’s Poe allows users to interact with multiple chatbots powered by ChatGPT, GPT-4, Claude, etc.. All of these bots have different personalities, so you can interact with them for different use cases. Earlier this week, the app launched a new feature that allows users to create their own bots simply using prompts. Early examples include a pirate language bota robot that convert messages to emojisAnd Japanese language tutor robot.
Apart from indie developers, this new wave of popularity of AI-powered apps has also benefited Microsoft. The company announced the integration of OpenAI technology with Bing earlier this year. Apptopia said that since then Bing’s average daily downloads have increased by 1,000%. While the search app entered the App Store’s top rankings in February, the ranking quickly dropped and downloads still remain 1/10th of Google’s downloads, according to data.ai.
Bernstein’s analysis also suggests downloads for Microsoft’s Edge browser, which also integrated an AI chatbot powered by OpenAI technologyjumped 135% year-on-year in the first quarter of 2023. The company said the browser reached 1/3 of Chrome’s download volumes for that period.
Despite this rise in popularity, Bernstein analysts are cautious. They said it was “too early to tell if any of these pure AI assistant apps were sustainable.” This signals that AI-powered chatbots are a new use, but the longevity of interest in them has yet to be tested.
But this onslaught of AI apps is also bringing questionable tools to app stores. Last week, Chinese tech giant Baidu sued Apple for allowing counterfeit apps of his bot Ernie on the App Store. Earlier this year, many apps labeled “ChatGPT” flooded the App Store and Play Store at a time when OpenAI hadn’t released an official API.