Mobile Application store revenues will be driven by smartphones and tablets.

1. Analysis & Outlook
Global Mobile Application Store Revenues – Smartphones & Tablets drive growth
According to ABI research, Total mobile app store revenues from pay-per-download,
in-app purchase, subscriptions, and in-app advertising will rise over the next five years,
growing from $8.5 billion in 2011 to $46 billion in 2016. Pay-per-download dominates
the category but in-app purchase is also rising. ABI Research estimates that 29 billion
apps were downloaded worldwide in 2011; up from 9 billion in 2010, the market
growing at 12% month-on-month with nearly 36 billion apps downloaded in 2012 to
smartphones and tablets. According to Strategy Analytics, 2012 Global mobile media
revenues will be $150 billion, which will be 17% rise from $128 billion in 2011 and
consumer spend will increase from $121.8 in 2011 to $138.2 billion in 2012 and
advertiser spend will almost double from $6.3 billion in 2011 to $11.6 billion in 2012.
Applications are forecasted to account for 19% of global consumer spend, or $26.1
billion in 2012, rising 30.7% from 2011. Revenues will remain relatively flat, music
will continue to be a strong category, accounting for 11.6% of consumer spend, or $16
billion and video will account for just 2% of consumer spend globally. Apple’s App
Store and Android’s Google Play are now big business with 32 billion apps expected to
be downloaded in 2012 compared with 23 billion last year.
According to Juniper Research, more than 31 billion apps downloaded to mobile
devices in 2011 and estimates consumer app downloads are expected to reach more
than 66 billion per annum by 2016. Annual revenues from consumer mobile
applications will approach $52 billion by 2016 as consumer smartphone adoption
accelerates along with the emergence of tablet market. According to International Data
Corporation (IDC), the global mobile app downloads are forecast to soar to 182.7
billion in 2015. By the end of 2014, Gartner forecast over 185 billion applications will
have been downloaded from mobile app stores, since the launch of the first one in July
2008. According to May 2011 IHS Screen Digest, combined revenues from the four
major mobile application stores run by Apple Inc., Google Inc., Nokia Corp. and
Research In Motion Ltd. will leap 77.7 %in 2011 to $3.8 billion from $2.1 billion in
2010 and revenues will continue rising in the next few years, jumping to $5.6 billion in
2012, $6.9 billion in 2013 and $8.3 billion in 2014. The total number of downloaded
applications in 2011 is expected to reach 18.1 billion by year-end, compared to 9.5
billion last year, 3.1 billion in 2009 and by 2014, downloaded applications will top
some 33 billion.
App Downloads ( Billion) IHS
33
18.1
9.5
3.1
2009 2010 2011 2014
Mobile Applications or Apps are specialized software that run on a mobile device such
as mobile phone, MP3 Player, Tablet that performs or executes a specific task and the
Rajesh Prabhakar Analyst Bio @ http://itbizcharts.blogspot.com/

2. Analysis & Outlook
apps have been existed for several years on personal computers, but real fame for
mobile apps is because of Apple Inc.’s App Store that has revolutionized the mobile
apps world through its App Store on iTunes, a unique monetization model, that
encouraged developers develop apps that educate, entertain and assist the mobile users
in their day to day lives. Today there are many different apps like games, music, social
networking, photo/video, productivity, entertainment, etc and there are more than
million applications that are downloaded close to 20 billion times onto smartphones,
feature phones, Mp3 players and tablets. Apple Inc’s App Store, Google Inc.’s Google
Play (Merged Android Market & Music Service), RIM’s Blackberry App World, Nokia
Ovi Store, Microsoft Windows Marketplace, Samsung Apps are the most popular apps
stores. In fact availability of millions of apps has fueled the sales of smartphones and
feature phones and developers are making money through a 70/30 revenue split where
in developers get 70% of revenues & rest to app store owners. Mobile device makers
too are including powerful chips, advanced software and hardware like advanced
display screens, long battery life, etc so that apps can run smoothly and customers can
easily access, install and use them easily.
App Stores are critical for smartphones and tablets success and developers need to be
attracted and encouraged to develop applications that are bought and downloaded by
consumers. Developers need to be provided with necessary software development
toolkits, constantly be informed various updates being made to the core software code,
favorable revenue splits and conferences have to be organized regularly so as to keep
the interaction going and since past couple of years many application stores have been
set up by various players, which also created a tough competition among the various
stores to attract and retain their developers. Developers have to constantly develop and
innovate new applications, work to add new features, improve app users experience,
localize the app according to user’s regional background, culture, language and make
the apps more users friendly to survive in the highly competitive market. App Store
owners too have to tightly control the content, organize the store properly and the
quality of applications on the stores has to be maintained to attract consumers and earn
revenues. Since consumers are looking for accessing the various products and services
they use through their mobiles and tablets, businesses are forced to include apps as part
of their integrated multi channel distribution systems and apps help businesses to
engage and retain consumers which are also fueling the mobile applications market.
Developers and Content providers are actively looking for other storefronts other than
the current App Store fronts and with development of technologies like HTML5 will
allow them opportunity to offer apps that consumers download directly and install
easily without the App Stores. The competition is further intensified with mobile
operators and telecom companies are offering their own app stores for consumers and
there is even more competition for attracting the developers. But in near future Apple
App Store will dominate the market distantly followed by Android and the
monetization of apps at stores other than Apple App Store is a major concern and in
fact slowing down the App Store revenues growth. Pay per click and Pay per download
models are loosing to In App Purchase models as consumers are more interested in free
apps and content and are not interested in paying for apps upfront. Games dominate the
market followed by music and social networking apps, but photo/video sharing apps
and productivity apps are gaining prominence.
Rajesh Prabhakar Analyst Bio @ http://itbizcharts.blogspot.com/