Mobile applications (apps) have been around since
the late nineties and the apps stores have been available for a
quite some time as well. Operators have been offering content
and applications on their appstores for most of the last decade.
But it wasn’t until the launch of Apple Appstore that the
appsworld started to blossom in earnest. First, it fundamentally
changed the revenue model in favor of the developers which has
become the current defacto standard (70/30) in the mobile apps
business. Second, it brought more developers into the ecosystem
as it fostered the notion of focusing on just 1-2 platforms
rather than the entire device ecosystem to be relevant. Third,
the time-to-market equation changed for developers so that they
can get the application from conception to market in a fraction
of a time of what was possible in the past. Finally, the
importance of a seamless end-to-end user experience to increase
usage and monetization became a core principle in the mobile
apps space.
While Apple has played a significant role in
reenergizing the mobile apps space by bringing more consumers
and developers into the ecosystem, there is significant activity
outside the iPhone or smartphones space that is often not
discussed. The purpose of this research study is to take a
holistic look at the mobile apps space across all platforms and
on a global basis to get a sense of the size of the mobile apps
market and the direction it is headed.
The overall mobile apps downloads are expected to
increase from over 7 billion in 2009 to almost 50 billion by
2012 growing at the rate of 92% CAGR. The revenue from mobile
apps which includes both paid downloads and revenue from
advertising and virtual goods is expected to increase from $4.1
billion in 2009 to $17.5 billion by 2012 at the rate of 62% CAGR.
Though ondeck (operator managed) mobile apps sales exceeded
those from offdeck in 2009, by 2012, offdeck is expected to hold
the lion share of the mobile apps revenue.
The dynamics of the app market are quite
different in emerging nations where to effectively monetize the
significant app momentum (app downloads/active user and growth
rates in some of these countries exceed those from the western
markets, irrespective of the device type), creative strategies
are needed to attract new consumers and different business
models will be required to make the regional ecosystems viable.
Overall, by enhancing discovery, improving user
experience, dropping price barriers, and increasing developer
revenue share, the apps ecosystem can continue to prosper. The
paper presents the results of the study in more detail as well
discusses the future of mobile apps and how the app economy is
likely to evolve.
Download full paper
My thanks to Getjar for
supporting the research.
Thanks
Chetan Sharma
Disclaimer: Some of the companies mentioned in this note are
our clients.
