According to a new research report from the analyst firm Berg Insight, the number of mobile application downloads worldwide doubled during 2012 and reached 60.1 billion, up from 29.5 billion in 2011. The growth will continue and annual downloads will reach 108 billion by 2017.
Berg Insight estimates that revenues from applications, including direct revenues and in-app ad revenues, reached € 6.4 billion in 2012. Berg Insight forecasts app revenues to grow at a compound annual growth rate of 17 percent to reach € 14.1 billion in 2017. Apple’s App Store is the clear leader in monetisation of mobile apps and will keep the number one position during the forecast period. Google Play and Windows Phone Store are anticipated to be number two and three respectively in 2017.
The increase in app downloads during 2012 comes mainly from Apple App Store, Google Play and some of the third party app stores. Third party app stores pushed Android to become the leading platform in terms of app downloads during 2012. While many Western third party app stores are struggling, the situation is different in other parts of the world. “Third party app stores are especially popular in China and other markets where Google Play hasn’t become the default on-device app store” said Johan Svanberg, Senior Analyst, Berg Insight. Monetisation is however particularly challenging in these markets, even though free to download strategies such as in-app advertising and in-app payments are promising and have been moderately successful.
The most important trends on the app market today are the popularity of free to download apps and multiplatform support. Furthermore, publishers commonly incorporate social features, where some build their own social platforms and others use existing social networks in order to expand their application user base and increase engagement. “Every app can find its own way to success, but common strategies today among many of the top revenue generating app developers are to publish apps featuring a social layer on more than one platform using free to download monetisation” adds Mr. Svanberg. The mobile app market is highly competitive, but the economical upside can be great for the successful publishers. “Like almost no other digital product, mobile apps represent a global opportunity with more or less instant worldwide distribution” concludes Mr. Svanberg.