The momentum behind app stores shows no signs of slowing. A study this week from app store GetJar (actually fielded by Chetan Sharma Consulting) predicts the market for mobile apps growing to an astounding $17.5 billion in the next three years, overtaking the market value of music CDs predicted to be sold then ($13.83 billion). On a pure app level, the study predicts mobile app downloads to grow from seven billion in 2009 to almost 50 billion in 2012. Another take on the study emphasized the sheer number of app stores around these days, noting there are now 38 mobile app stores operating today – with more appearing every day.
The biggest question may be the split of paid/free apps, which will also affect the app advertising market:
The big question is whether apps will continue to largely be free and subsidized with advertising, or whether consumers will buy them. The overall revenue from both paid and ad-supported downloads and virtual goods is expected to increase from $4.1 billion in 2009 to $17.5 billion by 2012. But the mix will change over the next two years: The report found that advertising-based revenue accounted for about 12 percent in 2009, but by 2012, advertising is expected to generate 28 percent of revenues.
The Connected Planet take, Sarah Reedy:
Mobile apps have undeniably changed the game for most of the mobile ecosystem, but they haven’t yet been a significant revenue generator, except for a lucky few. That appears to be changing, and fairly rapidly too. Consumers are showing less price sensitivity, especially to those apps priced low enough to not require much thought. Even more encouraging, though, is the fact that mobile ads are finally starting to make a difference. The ‘year of mobile ads’ has become a joke in the industry, because while most are bullish, there hasn’t been much notable action to date. That is starting to change too if you believe the forecasts. Most ad networks have already begun to move their focus from the mobile Web to mobile apps, especially on smartphones. And new devices like the iPad will also open up even more opportunities for revenue. All things told, the potential of apps to generate money is great news for developers and their respective app-store owners, although underlying issue remains – namely there are still 38+ app-store owners to choose from. Discoverability challenges, fragmentation and competing interests will continue to plague the (increasingly profitable) mobile app industry.
That’s our take on this, let us know what you think in the comments below:
