🗞 AI Wars
Hi 👋
We're back to our usual programming this week and I have a nice roundup of trends for you this week starting with a new entrant into the AI apps category, the highest-earning apps (which are about to cross a serious milestone), premium dating, and more.
Ariel.
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In this newsletter
Insights
1. Claude is Having a Hard Time Chasing ChatGPT - Is AI All About the Model?
These days, when most people think about AI they think about OpenAI's ChatGPT, even though there are a few direct competitors and loads of thin wrappers.
Anthropic, the company behind Claude, a model competing directly with ChatGPT, is trying to change that.
Claude, which was released to the App Store and Google Play over the last few months, has finally reached its first $1,000,000 of gross revenue.
Is it a milestone? Yes. But is it a record? Not at all...
I used our App Intelligence to see how fast different AI apps, originals and wrappers, reached their first $1M of gross revenue. Let's have a look at the results:
For this comparison, I chose Claude, ChatGPT, Microsoft Copilot, Perplexity, and ChatOn, which is one of the most popular wrappers right now.
It should come as no surprise that ChatGPT wins this race. Our estimates show it reached its first million in just three weeks. Right now ChatGPT is grossing around $1.5M every day, and that's also growing rapidly.
ChatOn, a thin wrapper on ChatGPT with a few conveniences, reached its first million in 11 weeks. Our estimates show ChatOn grossed $6.6M in July.
Claude ranked third in this comparison, having reached its first million in 16 weeks. I think Claude's way forward will be extremely challenging on mobile. More on that in a bit - let's finish the analysis first.
Microsoft's Copilot, which is really a wrapper around ChatGPT, got its first million after 19 weeks and needed a super bowl ad to get there. Copilot grossed just $678K in July, according to our App Intelligence. What a difference.
And last on our list is Perplexity, which aims to replace traditional search engines with AI. Our estimates show Perplexity got to a million after 22 weeks. It grossed just over a million in July, its highest haul to date.
Given this comparison, the obvious question is, "can Claude grow?". The answer is maybe...
As it is right now, Claude, the app, feels like a plain version of ChatGPT. An older one at that. So if you compare the two, there's really no reason to use it over ChatGPT. I suspect Anthropic is banking on its model outshining ChatGPT, and even if it will, I doubt people will switch over.
Why?
I've been saying this for a while but the main challenge of these apps is making it easier for the masses to interact with a text based AI. ChatGPT didn't exactly do it, but it was the first, had a ton of publicity early on, and augmented that with paid ads, that it became the go-to solution.
Thin wrappers like ChatOn are trying to do that by building little conveniences that are really just predefined prompts, to make AI more user-friendly, and that's leading to millions in revenue without owning the core technology.
Claude has neither, and based on its monthly revenue, we estimate that Claude has 25K paying subscribers so far. Sounds like a lot but ChatGPT added 291K new paying subscribers in July, so it really isn't.
I believe that for Claude to have a chance it needs to learn from the thin wrappers and not to copy ChatGPT. If Claude augments it s simple chat interface with more actionable features the masses can use, and also takes promoting its mobile app seriously, it might have a chance. And none of this has anything to do with its model.
2. The Summer Slump Continues - The Most Downloaded Apps in the World in July
I crunched the numbers and ranked the most downloaded apps in the world in July. The trend to watch this year is an ongoing download slowdown, which the summer continued to deliver.
Instagram was the most downloaded app in the world in July. Our App Intelligence shows it retained the #1 spot with 61M downloads from the App Store and Google Play, the same as June.
TikTok came in second with 51M estimated downloads, a touch less than June's total, and pretty much on trend right now. The decline was mostly on the App Store with a small hit on Google Play.
Facebook, WhatsApp, and Temu round out the top five with just a touch fewer downloads vs June. Well, all but Temu.
Temu hopped into the #5 spot, up one spot from June, thanks to a 30% growth sprout in downloads that added 11M new downloads in July, according to our estimates.
July was Temu's biggest month of downloads ever, ending the month with 38M estimated new downloads from the App Store and Google Play.
Driving the increase is Temu's rollout in Brazil, one of the highest download-generating countries on Google Play. Temu launched there in June after securing a tax exemption that was later revoked by the government.
Clearly, tax exemption or not, Brazilians want Temu, a trend I don't expect to slow down after seeing Temu's growth in the US.
Also happened in July - Telegram and CapCut dropped, Threads and Snapchat rose.
Together, we estimate that the top 10 most downloaded apps were downloaded 352M times from the App Store and Google Play in July. A tiny drop when compared to July, so the trend continues.
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3. Counting Down to a Billion! The Highest Earning Apps in the World in July
Revenue of the highest-earning apps rose 11% in July, according to our App Intelligence. I chose to open with what's usually the conclusion because this is a big bump!
This increase brings the total closest it's even been to a billion. I'll leave the amount to the conclusion.
TikTok was, again, the highest-earning app in the world in July. Our estimates show it ended the month with $221M, nearly 20% higher than June's haul. And that's net, which is what's left after Apple and Google take their fees.
YouTube's revenue rose 11% and ended July in second place with $150M of net revenue.
Disney+, Tinder, and Max round out the top five highest-earning apps in July, and if you remember last month's list you'll know it's identical. In fact, only one of the 10 apps in this list isn't the same as June and that's Peacock.
Peacock replaced Hulu thanks to a spike in revenue generated by the Olympics. We estimate that Peacock brought in $40M of net revenue in July, a considerable increase over June's $32M which is what the streamer averaged every month since April.
Although it's the Olympics to thank for this spike, Peacock has seen a lot of growth in general in the last year. We saw that in our 2024 Video Streaming App Industry Report. Check it out for more details.
We estimate that together, the top 10 highest-earning apps brought in $880M of net revenue from the App Store and Google Play in July.
This is the closest we've ever seen the total get to a billion, and since we're looking at net revenue, it's what developers are keeping. And that's a trend we're seeing across all apps, not just the top earners.
4. Premium Dating is Hard - A Closer Look at The League
While traditional apps have been fighting hard for growth, niche apps have been sprouting and attempting to grow their own communities.
One of these niche apps, and the most expensive dating app you can download right now, is The League, an app that sells itself as the ultimate solution for professionals, and membership starts at $99/week.
And that's just the base tier. Its most expensive tier costs $999/week!
While The League is technically free, getting in without paying requires being on a waiting list. Once you're off the waiting list your ability to interact with others is extremely limited - very different than traditional apps like Tinder and Hinge.
With such limited access and such high prices for gaining real access, is The League even real?
According to our App Intelligence, the LinkedIn of dating apps brought in $1.4M of net revenue from the App Store and Google Play in July - it's biggest haul to date. And yes, most of that revenue (97%) did indeed come from the App Store.
Definitely looks real to me. But how big is it?
The League has 4 tiers and offers weekly and monthly pricing for each, making it challenging to back out an accurate user count. But if we take an average of all tiers and lean it a bit towards the "cheaper" tiers and divide we'll get roughly 3,600 paying members.
That's a very rough estimate, but it gives you an idea of how big the community is.
So while revenue-wise it feels real, at just 3,600 members, I think it's too early to call it a real threat to traditional dating apps. Its aggressive pricing is both a selling point but also a hurdle to growth, so like traditional dating apps, I won't be surprised if it makes its free plan a bit better to keep its momentum and hope it doesn't erode its user-base.
Traditional dating apps saw downloads and revenue decline in 2023 but both trends have reversed this year. While challenging, I expect to see more niche dating apps launching now that traditional dating apps are seeing growth.
5. Telegram Had its Best Summer (of Revenue) Ever!
Telegram Messenger saw a massive spike in revenue in July, adding the most new revenue in a single month, ever.
Our App Intelligence show that Telegram's revenue growth had pretty much stagnated for most of this year, averaging a little over $5M of net revenue (after fees) per month. March was a tiny bit higher, but that spike didn't stick.
In July, Telegram's net revenue rose to $7.4M, according to our estimates. Not only is it the highest revenue has ever been for the messaging app but also the biggest increase in a single month.
Following X/Twitter and Snapchat's moves to monetize their users directly, Telegram's ability to monetize its userbase has been fairly strong. Not as strong as the other two, but considering they're fairly different, I see this growth as being equal.
Let's see if Telegram can sustain this growth.
In other news, Telegram's CEO was detained in France yesterday. The French government believes that Telegram's lack of moderation tools and integration with crypto make it a host ot an array of illegal activities.
I don't expect this to have any impact on demand for Telegram or revenue growth, but it'll be interesting to see how this unfolds.
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And that's all I have for you this week. I hope you've learned something new and please share the newsletter. Check out our App Intelligence to get ahead of your competitors.
Note: All figures included in this report are estimated. Unless specified otherwise, estimated revenue is always net, meaning it's the amount the developer earned after Apple and Google took their fee.