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Thursday, March 07, 2013

Global App Revenues to Reach $20.4 Billion in 2013

According to the latest market study by Portio Research, the mobile apps business has matured. The worldwide apps market generated an impressive $12 billion in 2012, and in total 46 billion apps were downloaded in the year.

That is certainly an indication of a market in rapid growth. Just consider that the all-time cumulative total number of downloads stood at 37 billion at the end of 2011, but reached 83 billion by the end of 2012 -- more than doubling in one year.

So in 2012, more apps were downloaded last year than in the previous 5 years all added together. That being said, the app doubling phenomenon is forecast to happen once again in 2013.

Portio's new forecast predicts that 2013 will see 82 billion apps downloaded worldwide, taking the cumulative total to 165 billion apps by the end of this year. Revenues are set for rapid growth too, after 2012 saw full-year app revenues of $12 billion, in 2013 Portio forecasts worldwide app revenues to reach $20.4 billion.

From this doubling of the apps business in 2013, Portio also forecasts that downloads will continue to grow to exceed 200 billion per year by the end of 2017, and revenues in will reach $63.5 billion in the same year.

By comparison, the global mobile subscriber base is forecast to grow at a CAGR of 4.8 percent over the period 2012 to 2017, and annual handset shipments are expected to increase at a CAGR of 6.6 percent over the same time frame, but apps downloads are forecast to grow at an amazing 35.9 percent CAGR.

Portio data shows that in mature markets, usage of apps per person is starting to level off -- in Europe and North America -- and the number of apps downloaded per person is reaching a stable level.

What's driving the growth in the app download business is the rapid growth in smartphone and tablet sales. Smartphone shipments worldwide are expected to reach 823 million this year, in 2013.

Smartphones accounted for around 41 percent of total handset shipments during 2012. This figure is expected to reach 46 percent during 2013, and more than half (56 percent) of total handset shipments will be smartphones by 2017. From 680 million smartphones shipped in 2012, Portio says that they expect to see 1.296 billion smartphones shipped in 2017.

Similarly, tablet sales are enjoying explosive growth now. Tablet shipments are forecast to average a CAGR of 24 percent over the period 2012-2017, rising from 2012 shipments of 136 million, to 2013 shipments of 208 million, going on to 2017 shipments of 398 million devices.

Due to this rapid growth in smartphone and tablet sales, Portio now forecasts that over the period 2012-2017, the number of apps users will grow at a CAGR of 29.8 percent, to reach 4.4 billion users by the end of 2017 -- which is four times as many apps users as there are today.