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The economy may be tanking, but app developers aren’t suffering much, with a new report today claiming a whopping 25 billion mobile applications will have been downloaded by 2014, a figure that has skyrocketed from a paltry 2.6 billion applications downloaded in 2009.
Direct and indirect revenues from mobile applications are expected to exceed $25 billion by 2014 according to the report by Juniper Research which also noted that “while the overwhelming majority of app revenues were currently accrued from one-off downloads, the increasing utilization of in-app billing to enable incremental revenues from additional mobile content will see value-added services (VAS) providing the dominant revenue stream by 2011.”
Indeed, it seems punters are going mad for apps, with app stores world over gaining popularity for their cheap and often trivial goods.
Even operators are going gaga over apps, falling over themselves to deploy their own app stores in a bid to maintain content revenue share. Juniper reckons, however, that in the long term, the greatest benefits to operators would be derived from data revenues associated with app usage rather than from the retail price of apps and content, “providing that the operators rejected the walled garden approach.”
Classic examples of this model being successfully put to work are app stores by China Unicom, India’s Bharti and Vodafone 360, with the latter spreading itself across no less than 247 mobile networks in over 60 countries.
Then there are the app megastores like GetJar, which is multi-platform and serves up over 65,000 applications to users who have rewarded the firm with its one billionth download last month.
Indeed, GetJar even believes 25 billion to be a shockingly underestimated figure for the number of apps expected to be downloaded by 2014. In a GetJar sponsored survey conducted by Chetan Sharma Consulting, the number of apps predicted to be downloaded by 2012 is a whopping 50 billion, helped along by the Chinese and Indian markets.
That represents astounding growth levels at 92% year-over-year, and an app cash cow worth $17.5 billion by 2012.
Copying Apple, however, may not be the way to leapfrog ahead, according to the Juniper report, with its author Dr. Windsor Holden noting that while iPhone punters may be buying the phone for the apps, “that’s not been the case with other handsets.”
Even if a firm has a huge subscriber base, says Holden, its “addressable market is a fraction of that – and spread across a variety of operating systems and handsets.”
In terms of trends, Holden also argues that app business models are sure to change as “freemium” becomes increasingly popular, offering subscription models, micropayments for virtual goods, in-app purchases, and paid upgrades.
Games, writes Holden, will remain the largest category in terms of overall app downloads and revenues, although Multimedia & Entertainment apps will attract the greatest share of VAS revenues from 2009 onwards.
All in all, App stores, posits Holden, “present a significant challenge to traditional content aggregators who may be obliged both to expand the range of their content portfolios and to amend their business models to remain viable.”
