🗞 Time to adapt

#183 - Zoom is chasing Meet, Telegram fights stagnation, Bluesky hits a big milestone, the OG Ai might be in trouble, and Pokémon Sleep. U.S. Revenue Index (30 Days) App Store 386.18 -12.8% Google Play 246.54 -1.6% Hey {NAME} 👋 September has been a busy month for apps, and not just because both the Mobile Download Index and the Mobile Revenue Index are down. Ariel. In this newsletter: - Happy birthday Telegram - Google is catching up - Is Bluesky catching on? - AI is tough... - Where's Pokémon Sleep? [View in browser]( --------------------------------------------------------------- Insights 1. Telegram Turns 10 and Revenue is... Stangating. And Instagram. And Discord. Telegram, the messaging app that promises privacy first, has seen demand growing massively over the last few years. It also started monetizing its users in 2022. That's a new trend that's becoming more popular thanks to Twitter. Also also, Telegram turned 10 this August and added a feature that fits a social network more than a messaging app - [Stories](. Companies clone features that don't always fit when revenue isn't growing as they want - is this the case here? I've covered Telegram's revenue growth several times since the subscription rolled out last year, and in the first few months, things were looking great. Between June and December of 2022, Telegra's in-app net revenue grew 6x from a little under $250K in June to more than $1.5M in December, according to our App [Intelligence](. And that's net which means what Telegram gets to keep after Apple and Google take their share. The App Store was responsible for the majority of this revenue, roughly 75%, but that's pretty normal. But when we look at where the money is coming from "normal" ends. On the App Store, Telegram's biggest markets include Russia, the US, China, and Ukraine. In that order. That's not something you see normally. When you combine this with revenue from Google Play, which isn't available in Russia or China, the US wins, but only for that reason. 2022 was a very good and promising year for Telegram, so naturally, it was expected that 2023 would continue to follow the growth trend. Right? Well, that depends. --------------------------------------------------------------- 2. Google Meet Sprints to Close Demand Gap in Race with Zoom One of the most used features of Google Meet, in my experience, is the ability to blur the background. Not only is it useful to hide pretty much everything but the speaker, it also works pretty well across a variety of cameras and processors. Which is why almost everyone I talk to on Meet uses the feature. Why do I bring it up? Because Zoom has finally copied it! Zoom has gotten a lot of updates over the last few years, as it transitioned from just another video conferencing app to the most popular video conferencing app everyone's mom is using. But this update, which in my opinion is more useful than many of the previous ones, didn't come until now. Why now? Looking at the trend of downloads for Zoom and comparing it with Google Meet the reason becomes very obvious. Zoom has been losing downloads over time. And that was expected. Zoom saw so many downloads during the pandemic, not just from those needing it for work but also from those who needed it to replace real interactions. That trend is over now - and has been for quite a while, taking away the extra downloads Zoom got. But that's only half the story - the other is the rise of Google Meet's downloads. I compared downloads of Zoom and Google Meet on the App Store because Meet is pre-installed with some Android phones making the comparison a bit unfair. Going back to 2022, Zoom was in a very different league than Google Meet when it comes to downloads. Zoom was seeing nearly 6x the downloads Meet was. But the two trends were heading in opposite directions. Zoom's weekly downloads dropped by about 20% by the summer of 2022 while Meet's rose. By December the difference was less than 3x. But Google Meet continued to grow, and in 2023 that happened even faster. Demand for Google Meet rose sharply in January, getting danderously close to that of Zoom. Both in the millions. Meets downloads fluctuated for most of the year, but around that mark, and now the gap between the two is just 1.2x. Yes! Zoom lost a 6x lead over the span of a little under two years. Zoom's constant updates, which always seem to happen when I'm already late to meetings along with its bulkiness and disdain for a web-based interface (even though one exists) are starting to negatively outweigh the benefit of being able to video chat without needing a Google account. How long do you think it has? --------------------------------------------------------------- 3. Bluesky Just Hit 2,000,000 App Downloads Say what you will about Twitter/X, there's nothing else like it out there. But Bluesky is trying, and bit by bit, is growing. I'm still X all the way, but I keep an eye on alternatives all the time, just in case. When I looked this time, I noticed Bluesky, the still invite-only alternative started by Twitter's ex-founder Jack Dorsey, hit a pretty big milestone - 2,000,000 downloads from the App Store and Google Play, according to our estimates. That's not Threads kind of downloads, but considering there's no big push and no big brand name behind the protocol that's also an app, this is a milestone. And more important than the number is the trend. Two million downloads is a serious milestone for any app. It's even more impressive considering Bluesky still requires an invite to join. Now, 2M downloads doesn't mean 2M users as some have corrected me in the past, but it does mean the potential for 2M users. Bluesky's early growth was very spikey, which means it was more reactive than actual growth. And it correlates with other events in the industry, mainly Twitter/Elon shenanigans. Truth Social is in a similar boat. While most spikes return back to their starting point, the last big spike for Bluesky didn't. On July 2nd, the weekend Twitter temporarily throttled users, Blueky saw it's highest spike ever - 116K downloads from the App Store and Google Play, according to our estimates. Downloads slowed down within a few days, but that week saw 370K downloads. That's roughly 20x the downloads Bluesky saw a few weeks before, where the app averaged two thousand downloads a day. --------------------------------------------------------------- 4. The Proliferation of AI Tools is Taking its Toll on Grammarly Writing is one of those things that are challenging for most. Those who aren't experts need all the help they can get, and the experts can use a watching eye. That's where Grammarly, an AI-based tool for writing comes in, and in my experience it's fairly useful. Over the last few months, thanks to ChatGPT, AI has made its way into almost everything. From standalone apps dedicated to writing to features built into popular writing platforms like Notion and Google Docs. Grammarly's AI isn't ChatGPT under the hood, but here's the important question - Can that protect its growth when AI for writing is becoming more common than ever before? Short answer - Not really... Grammarly's mobile apps, which bring Grammarly's AI for writing as a keyboard, have enjoyed pretty consistent growth over the last few years. Revenue grew about 50% in 2020 and a whopping 150% in 2021, as more communication transitioned into writing. Revenue dropped in early 2022 but still grew a modest 20% throughout the year. 2023 is where things started going sideways. After a strong Q1 where revenue grew nicely, ChatGPT became all the rage and thousands of apps were built around it. Many to help with writing, and "thanks" to a very early market, the prices were all over the place. Grammarly's mobile revenue reacted and started dropping roughly 10% every month. By July, revenue dropped to where it was a year prior. All of Grammarly's growth disappeared. In August Grammarly started making a push to highlight its AI and improved its offering which helped push revenue up to May's level. Still not great, but better than dropping... I've poked at thin ChatGPT wrappers in previous insights and their lack of competitiveness, but the magic of ChatGPT has made it hard for full-pledged AI platforms to grow as well. That's going to be a problem for more generalized AI in the future and will lead to more specialized AI to target different tasks. Like writing. --------------------------------------------------------------- 5. Checking In - How Disruptive is Pokémon Sleep, Really? A couple of months ago a new app sporting the Pokémon brand appeared on the App Store and Google Play, and its purpose surprised me a little. Pokémon Sleep is a Pokémon-themed sleep tracker led by mascot Snorlax, the sleepy Pokémon (for those who know). Sleep tracking is a comfortable niche ruled by a small number of competitors, each hauling in millions of dollars every month. So, why not disrupt it? That said, Pokémon Sleep is only disruptive in that it exists... Its features mirror other apps. Can Pokémon Sleep beat the incumbents simply for its brand, and will it take away their demand or compete alongside them? The app has been out for three months, so let's have a look at its revenue (estimates) to answer those questions. Yes. Lots of yes. Pokémon Sleep's modest first month, which almost beat the top competitor in terms of revenue, was nothing compared to its second month on the market. In August, the app's first full month in the App Store and Google Play, Pokémon Sleep earned a whopping $5.8M of net revenue, according to our estimates. And that's net which means what's left after Apple and Google take their fees. The competition remained fairly static... I got excited by the number so let me rewind a bit and talk about why this is big. Sleep Cycle and ShutEye® are the two popular sleep tracking apps you'll likely come across when searching for any combination of keywords that involve sleep and tracking. They've been the highest earners in the category consistently for quite a while now. But 2023 hasn't been a great year for sleep tracking, especially not on the App Store "thanks" to Apple's addition of sleep tracking in the Health app. While not exactly the same or as featureful, competing with something pre-installed is challenging, especially as a paid solution. Looking at revenue, the trend is pretty obvious. Both Sleep Cycle and ShutEye® saw revenue drop double digit percent between January and June - even before Snorlax made it on the scene. Earning more than the leader on month one while the incumbents are already down is a great achievement. Growing to more than 4x their revenue on month two is just silly. The good kind. Revenue dropped a bit in September to $4.4M, still 4x the competition. Here's what's most interesting - It doesn't look like that revenue is coming out of the competitors. Pokémon Sleep is operating in a lane of its own likely monetizing fans of the brand more than users in need of a sleep tracker. Pokémon Sleep's lack of proper ASO aids in that - Search for any combination of sleep and tracking and you won't find the app without swigin a whole bunch. A missed opportunity, yes, but probably by design because they simply don't care. They're targeting a different user pool. I wonder what's the next niché for Pokémon to take on. 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