Mobile app stores to hit over 100 billion downloads

2013-09-20 12:08
App stores will drive revenue growth in the mobile market, Gartner has said. (Duncan Alfreds, News24)

App stores will drive revenue growth in the mobile market, Gartner has said. (Duncan Alfreds, News24)

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Cape Town - Mobile application store fronts are expected to reach in excess of 102 billion downloads before the end of the year, an industry group has announced.

According to industry tracker Gartner, the growth will nearly double the 64 billion total from 2012.

The company also said that revenue in 2013 will reach $26bn, up from $18bn in 2012.

The numbers underscore the growth of smartphones which have overtaken feature phones in market share, especially the price declines have seen adoption.

As expected, Gartner said that users generally downloaded free applications, which made up 91% of downloads, but the company insisted that in-app purchases would account for 48% of purchases by 2017. Last year's percentage of in-app purchases was 11%.

Application ecosystem

The company suggested that strong growth of downloads would continue in 2014, but the pace would decline.

"The average downloads per device should be high in early years as users get new devices and discover the apps they like. Over time they accumulate a portfolio of apps they like and stick to, so there will be moderate numbers of downloads in the later years," said Sandy Shen, research director at Gartner.

Though Apple was first to market with its App Store, it is facing strong competition from Google Play Store, in terms of the application ecosystem.

The App Store commands 60% of downloads, significantly behind the Play Store at 80%. This can be ascribed to the dominance of the Android operating system which accounts for nearly 80% of all smartphones.

Apple's iPhones make up around 14.2% of the smartphone market.

"iOS and Android app stores combined are forecast to account for 90 percent of global downloads in 2017. These app stores are still increasingly active due to richer ecosystems and large and very active developer communities," said Brian Blau, research director at Gartner.

He indicated that Gartner expected app downloads to flatten by 2017.


In-app purchases

"However, we expect average monthly downloads per iOS device to decline from 4.9 in 2013 to 3.9 in 2017, while average monthly downloads per Android device will decline from 6.2 in 2013 to 5.8 in 2017. This relates back to the overall trend of users using the same apps more often rather than downloading new ones."

Gartner predicted that future revenue growth would be driven by in-app purchases (IAPs). This model is already attractive to developers because it offers people an opportunity to use the app, but then pay for additional features or functionality.

"IAP is expected to have strong growth in 2013 and 2014 and slow in later years. This is due to smart devices reaching more mass-market consumers whose willingness and/or affordability to spend on IAPs is lower than early adopters. Nevertheless, IAP will become a major monetisation method for apps stores and developers," said Gartner.

Generally it appears that iPhone users are more willing to spend more money on apps that Android phone users.

As a tacit recognition of this, Google on Thursday released its digital wallet for the iPhone, in direct competition with Apple's built-in Passbook.

The search giant likely wants to attract more customers to its services, regardless of device.

Gartner will hold a Symposium/ITxpo in Orlando from 6 - 10 October 2013 to discuss mobile trends.

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Read more on:    google  |  apple  |  e-commerce  |  mobile

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