Every smartphone platform, it seems, now has an app store. The iPhone started the trend, or at least made the most significant move, just as iTunes did for digital music. The other platforms followed suit, and what they created is now a multi-billion dollar industry. Consumers spent $4.2 billion on mobile applications in 2009, and as expected that number will only grow in 2010 and beyond. Just how much will it grow this year? Gartner research forecasts aggressive growth, with mobile app revenues rising to $6.2 billion in 2010, an increase of two-thirds over 2009. In just four years, that number could more than quadruple. It looks like the right time to get into the mobile app industry. While the iPhone store reigns as the best stocked app store with more than 110,000 applications, three other platforms have developed decent competitors. The Android store contains over 8,500 apps, BlackBerry App World has over 3,462, and Noka Ovi has over 2,213, according to a recent Mobclix survey. Verizon also has its own App Center, which would change the playing field from platform to carrier. It has the potential to deliver apps to more devices, thereby increasing the number of consumers who can download a mobile app. That’s the whole idea, really. The aggressive forecast for mobile apps won’t result from consumers spending more, but rather from more consumers having access to these app stores. Don’t believe me? Then ask Stephania Baghdassarian, research director at Gartner.
Growth in smartphone sales will not necessarily mean that consumers will spend more money, but it will widen the addressable market for an offering that will be advertising-funded. The value chain of the application stores will evolve as rules are set and broken in an attempt to find the most profitable business model for all parties involved.
It won’t be all peaches and profits for developers, though. Some will have to use a free model in order to widely distribute their applications, a difficult proposition for any company. With advertising spread so thin on the internet, companies might find it difficult to turn a profit on that alone. Still, free apps should account for 82 percent of downloads this year, and up to 87 percent in 2013. Surely there aren’t enough advertising dollars to support 3.7 million applications. Further to that point, Gartner forecasts just $0.6 billion in mobile advertising in 2010. They did include ad-based free apps in their $6.2 billion forecast, better news for developers, but the low overall advertising dollars gives reason for pause. If general mobile advertising dollars sit that much lower than mobile apps, will there really be enough money in the free ad-based model? Even so, it seems like the future of the mobile app industry has nowhere to go but up. Via mocoNews.net