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November 7, 2012

Mobile app market to reach $35bn in 2017: report

Apple and Google continue to dominate the app market with more than 75% market share

By CBR Staff Writer

With the growth of smartphone market, mobile app market is expected to generate a revenue of $35bnby 2017, growing from just $1bn in 2009, according to a report by Stategy Analytics.

According to the report, "The Strategy Analytics App Ecosystem Opportunities (AEO) forecast – Mobile Apps Revenue Forecast: 2008 – 2017", the Apple and Google will continue to dominate the app market accounting more than 75% of revenue during the period.

With Windows 8 launched, the iPhone 5 and iPad Mini continue to draw interest, Android exceeds 1 million activations a day and RIM gearing up to launch BlackBerry 10 in early 2013, the market is expected get a boost, the report revealed.

Over the period, the app market will be driven by growth in targeted advertising, increased consumer interest in virtual goods and the adoption of subscription business models.

Paid downloads contributed nearly 70% of revenue in 2009 which is expected to reduce to less than 36% of the total revenue by 2017.

According to the report, advertising will be the main contributor in revenue by 2013.

As improved targeting helps maintain CPMs, companies will invest more in in-app advertising, and developers will depend on advertising to drive revenue.

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Strategy Analytics director of Apps Research Josh Martin said the battle for developers is on and supporting recurring revenue streams is essential to gaining developer support.

"It is for this reason that Microsoft and Research in Motion are ensuring their new platforms support in-app purchase and subscription in addition to paid downloads and advertising at launch," Martin said.

"They continue to battle for third place as the forecast shows Apple’s and Google’s app stores dominating revenue generation for developers throughout the forecast period."

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