Technology | Media | Telecommunications

Thursday, January 28, 2010

4.5 Billion Downloads from Mobile App Stores

Consumers will spend $6.2 billion in 2010 in mobile application stores while advertising revenue is expected to generate $0.6 billion worldwide, according to the latest market study by Gartner.

Mobile application stores will exceed 4.5 billion App downloads in 2010, eight out of ten of which will be (ad-supported or otherwise) free to end users of these Apps.

Gartner forecasts worldwide downloads in mobile application stores to surpass 21.6 billion by 2013. Free downloads will account for 82 percent of all downloads in 2010, and will account for 87 percent of downloads in 2013.

"As smartphones grow in popularity and application stores become the focus for several players in the value chain, more consumers will experiment with application downloads," said Stephanie Baghdassarian, research director at Gartner.

Games remain the top application, and mobile shopping, social networking, utilities and productivity tools continue to grow and attract increasing amounts of money.

An application can be free because the developer is offering it at no cost to the consumer while charging for other things within the application. There are also applications that are free to use but that charge for physical goods that you can have delivered through the application.

There are many applications that are free to users and derive their revenue from advertising. This can be done with banners as well as full page advertising between game levels for instance.

Worldwide mobile application store download revenue exceeded $4.2 billion in 2009 and will grow to $29.5 billion by the end of 2013. This revenue forecast includes end-user spending on paid-for applications and advertising-sponsored free applications.

Advertising-sponsored mobile applications will generate almost 25 per cent of mobile application stores revenue by 2013. They will likely also generate a groundswell of new broadband network traffic for mobile service providers.

High-end smartphone users today tend to be early adopters of new mobile applications and more trustful of billing mechanisms, so they will pay for applications that can meet their needs.

Average smartphone users will become less tech-savvy as smartphones come down in price to have a mass-market appeal. These users will likely be more reluctant to pay for applications.

"Application stores will be a core focus throughout 2010 for the mobile industry and applications themselves will help determine the winners among mobile device platforms," said Carolina Milanesi, research director at Gartner.

Consumers will have a wide choice of stores and will seek the ones that make it easy for them to discover applications they are interested in and make it easy to pay for them when they are required.