Angry Birds, YouTube, Instagram among top apps of 2012: Report

This year consumers spent on average two hours each day using mobile applications, an increase of 35 percent over last year, according to analytics firm Flurry. The number is expected to continue growing in 2013.

"2012 was a transformative tipping point in the way consumers use apps," said Craig Palli, a vice president at mobile marketing company Fiksu, adding that the biggest shift is in consumers' eagerness to turn to apps for a broad range of day-to-day tasks.

Categories such as social networking, media and entertainment, photo editing, and games, continued to captivate consumer interest, with YouTube and Angry Birds being the top free and paid apps respectively at Apple's App Store.

Meanwhile, several apps released this year quickly joined the ranks of the top downloaded and revenue grossing apps of the year.

The game Draw Something for iPhone and Android quickly gained widespread popularity when it was released in February, and despite dropping off, is still the second most downloaded paid app of the year Android and Apple devices.

"It had a big run and other multi-player puzzle-oriented games like newcomers LetterPress and ScrambleWithFriends proved popular, too," Palli said. "But in many respects these titles were inspired by the more revolutionary Words With Friends."

Songza, a music-discovery app for iPhone, Android and Kindle Fire, saw significant growth in both the United States and Canada, where it is now one of the top free apps on the App Store.

Paper, a sketchbook app for the iPad, is estimated to be one of the top grossing apps released this year according to Distimo, an app analytics company. It was named by Apple as the iPad app of the year.

But the real revolution, according to Palli, is among consumers who are eager to turn to apps for their day-to-day tasks, such as finding a taxi or hotel, following current events or increasingly, making payments.

"It is really consumers who are turning to apps first and traditional methods second," said Palli.

Uber and Hailo, which allow users to book limos and taxis, and AirBnB and HotelTonight, for finding accommodations, began to move mainstream in 2012, Palli said.

Payment apps such as Square, and Apple's introduction of the Passbook has further positioned the smartphone as a digital wallet.

This year, during major events such as the Olympics, Hurricane Sandy and the U.S. presidential election, the top apps on the App Store reflected those events, said Palli, showing the demand for keeping up with current events through apps.

© Thomson Reuters 2012