Why the app industry rewards excellence

The app market is highly polarized, with most of the value concentrated at the top. Studies show that in each major app category, such as social media, entertainment, gaming, productivity, and health, the top three to five apps consistently capture the majority of revenue and user engagement.

In fact, the top ten apps per category globally account for 87% of all App Store traffic. With 33 categories on Google Play and 24 in the Apple App Store, just 240–330 apps dominate the landscape—leaving limited visibility for the rest.

This polarization is shaped by user preferences, app visibility, and the quality of the user experience amplified by outliers like social platforms that drive massive download volumes.

In some markets, apps open up opportunities to lead. In others, they demand investment simply to stay in the game. Either way, the stakes are high and the strategy matters.

Developing a mobile app requires significant investment in terms of time, resources, and capital. But the return on that investment depends entirely on how the app performs in the market.

Top apps in any category often see exponential returns compared to those ranked lower. Platforms like Spotify and Instagram dominate their spaces, capturing the majority of user engagement and revenue. However, the extent of this dominance varies by market. In some sectors, there is room for multiple players to succeed, particularly when an app supports a physical product or service.

Take ferry apps as an example. These are typically tied to a single operator, making the app a channel for upselling, loyalty, and convenience. Since the user is taking the ferry regardless, the app enhances the experience but does not determine the purchase. In contrast, apps like Spotify and Instagram rely entirely on digital engagement to drive growth, with no connection to a physical offering.

For businesses without a physical product, digital visibility and user engagement are not just helpful, they are critical to unlocking value from the app.

Top-performing apps benefit from lower user acquisition costs due to higher visibility and stronger organic reach. In comparison, mediocre apps often face challenges gaining traction and must invest more heavily in marketing and promotion to attract users.

App store algorithms consistently favor apps with high engagement and user satisfaction. A strong ranking boosts visibility, which leads to more downloads. These downloads generate additional reviews and ratings, further improving the app's position.

This creates a positive feedback loop. More visibility leads to more downloads, which in turn strengthens the app’s standing. As the app climbs the rankings, it gains organic exposure that reduces the need for paid acquisition. This cycle reinforces success and lowers overall user acquisition costs.

Top apps consistently achieve higher user engagement and retention rates, which are essential for long-term success. Users are more likely to return to an app that delivers a seamless experience and clear value. This strengthens the position of top-performing apps while making it harder for mediocre apps to catch up.

To illustrate this, Alchemer conducted a study surveying 100,000 users over two months to measure the impact of app ratings on monthly interactions. While the study has its limitations, it provides valuable insights that support these findings.

Investing in app development without aiming for the top can be risky. Apps that fail to reach the leading positions in their market often struggle to generate sufficient revenue to justify their development costs. Moreover, they face ongoing challenges in user acquisition and retention, creating a cycle of low profitability and limited growth.

Choosing the right technology is essential when building a top-performing app. Native app development with Swift for iOS and Kotlin for Android provides a range of advantages that help apps stand out in a competitive market. These include:

The app industry is not only competitive, it heavily rewards those at the top. The gap in value between a mediocre app and a top-performing app can be substantial, both in financial returns and market visibility. While investing in high-quality native app development requires significant resources, the potential payoff of becoming a market leader often makes it worthwhile.

To secure and sustain market share, businesses need a clear strategy and a commitment to excellence. As the digital landscape evolves, the stakes will continue to rise. Native app development remains a crucial factor for building standout apps in an increasingly crowded market.

To win, you need performance, visibility, and a clear strategy. Discover how top apps stay ahead—and how your business can too.

Read the full Mobile App Trends 2025 report