Data & Research

App revenue to top $15 billion as downloads jump 117 percent in 2011

App revenue to top $15 billion as downloads jump 117 percent in 2011
If there's one common theme running through the middle of every projection focused on the mobile industry, it's that app revenues are set to rise.

It's not the most insightful of predictions, in truth, given even a cursory look at the facts and figures paints a picture of growing consumer interest in the app market.

Nevertheless, research firm Gartner has put a figure on said growth in 2011, suggesting app revenues will surpass $15.1 billion in 2011.

App appetite

To put that number in some kind of context, Gartner claims 2010 revenue hit $5.2 billion, meaning app income will rise by 190 percent across the course of the year.

"Many are wondering if the app frenzy we have been witnessing is just a fashion, and, like many others, it shall pass," said Gartner research director Stephanie Baghdassarian.

"We do not think so. We strongly believe there is a sizable opportunity for application stores in the future. However, applications will have to grow up and deliver a superior experience to the one that a web-based app will be able to deliver."

Ads on the upIndeed, a closer look at Gartner's figures show the market is in a great state of flux than might first initially appear.

Said revenues won't just be generated by pure downloads – though those, too, will rise by 117 percent to hit 17.7 billion in 2011 – but, rather, also apps that employ advertising.

Coupled with the rise of the web-based app – which Gartner itself seems reluctant to define the exact impact of – knowing just which route to take to make the most money from their software will be the biggest question developers have to face in 2011.

"Native apps will survive the web enhancements only when they will provide a more-personal and richer experience to the ‘vanilla’ experience that a web-based app will deliver," Baghdassarian added.

Marketplace might

Overall revenue also depends on two other factors ; the growth of marketplaces outside of Apple's App Store, and the remaining prevalence consumers still have towards free apps.

Free releases will still make up the majority of downloads in 2011, Gartner states, topping 81 percent. It's a dominance that has been on the decline since 2008, but the firm believes free apps will being to broaden their share of the market from 2012 onwards – though the firm doesn't reveal why.

As for the marketplaces themselves, the launch of app stores on Windows Phone 7 and bada in 2010 helped grow the market considerably. Apple remained the dominant player, of course, with close to nine out of 10 app downloads last year having been made on the App Store, but Gartner claims all the marketplaces have a role to play in growing the market in 2011.

However, it's the portion of revenue platform holders currently take home from each and every sale that Gartner believes will have a big impact on the market in the coming years.

The 70/30 split enforced by most marketplaces will drive many developers towards advertising, Gartner claims, generating a little under a third of all revenue generated on app stores by 2014.

[source: Gartner]

With a fine eye for detail, Keith Andrew is fuelled by strong coffee, Kylie Minogue and the shapely curve of a san serif font.

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