Technology | Media | Telecommunications

Tuesday, January 26, 2010

Continued Growth for the Mobile App Stores

Mobile application stores enabled 3.6 billion apps to be downloaded in 2009 -- which is expected to rise to 6.6 billion this year, and grow to 16.2 billion in 2013 -- according to the latest market study and assessment by Futuresource Consulting.

At the upcoming Mobile World Congress event, the App Planet showcase will be devoted to this phenomenon that's helping to fuel demand for Mobile Internet subscription and consumption.

"More than 85 percent of app store downloads are currently free to users, and we expect this percentage to remain stable for the next few years," says Patrik Pfandler, senior market analyst at Futuresource.

"The market will experience vigorous consumer spending, and the paid-for market has already developed beyond the established gaming segment. Our forecasts are showing global revenues of $4.6 billion this year, rising to nearly $15 billion in 2013, which includes payments for direct pay-per-download and indirect value-add services like in-app payments and subscriptions."

Futuresource says that these figures are directly attributable to app stores.

Factor in mobile content revenues which fall beyond the world of the apps store -- like direct downloads from gaming companies, handset manufacturers and operators, video downloads, music and ringtones -- and the whole package will be worth $38 billion worldwide by 2013.

By the end of 2009, approximately 70 million Apple iPhone and iPod Touch users downloaded over three billion applications from the Apple app store, resulting with Apple taking a 70 percent share of total app downloads that year.

Nokia is a key player and is currently driving its own Ovi-based apps program. Samsung is also pushing apps development as a core element of its strategy, with its own and third party operating systems. Meanwhile, RIM (Blackberry) is driving hard into the consumer market and is well-placed to play a pivotal role in helping to counter-balance the strength of Apple.

Google's foray into the mobile hardware market and the vast resources it can channel into its Android platform place it in a favorable position, but Google will need strong support from other handset vendors to reach critical mass.

As with mainstream Internet browsing, search discovery will be critical to the success or failure of any app, particularly as application numbers increase exponentially and developers look to gain competitive exposure.

"Word-of-mouth and viral marketing campaigns are the key methods of directing users towards particular apps and app stores," says Pfandler, "though smartphone users are also browsing apps charts, responding to mobile ads and ads embedded within their existing apps, as well as reacting favorably to more traditional online, television and even print advertising."

Last year, mobile phone ownership exceeded four billion users, which equates to nearly 60 percent of the world's population. Although the total handset market began to decline in 2009, smartphone sales are rising fast, with Futuresource predicting that more than one billion people will own a smartphone by 2013.

Moving forward, the success of the app store holds promise for other devices such as tablets and connected TVs. In particular, Futuresource expects applications to become a key feature of connected TVs and Blu-ray disc players.