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Friday, May 13, 2016

156 Billion Mobile Apps Installed Worldwide During 2015

Mobile device users installed nearly 156 billion software applications (apps) worldwide in 2015, generating $34.2 billion in direct (non-advertising) revenue. According to the latest market study by International Data Corporation (IDC), these figures will grow to more than 210 billion installs and nearly $57 billion in direct revenue by 2020.

However, while the market will continue to grow throughout the forecast period, IDC now expects to see slower growth in both application install volumes and direct revenue over time. This trend, which is largely driven by market maturation, will see annual install growth fall to single digits over the second half of the forecast period.

Mobile application install volume will experience a five year compound annual growth rate (CAGR) of 6.3 percent. Meanwhile, direct revenue from mobile apps will also experience slower growth by the end of the forecast period, although the five year CAGR will remain in the double digits at 10.6 percent.

Market Development for Mobile Apps

"While they provide a convenient measure of the mobile app economy and its beneficiaries, we caution that preoccupation with download or install volumes and associated direct revenue may miss the thrust of changes in the mobile marketplace," said John Jackson, vice president at IDC.

According to the IDC assessment, Facebook and Google continue to dominate mobile advertising spending thanks to the scale and sophistication of their network effects, with Facebook's moves to incorporate news and other interests into its experience will likely pull traffic and install volumes away from discreet apps.

Similarly, the emergence of bots, which seek to automate interactions in a contextually infused way, are another in a series of examples of value being created above the mobile device OS layer and even above the app.

Apple's App Store ecosystem captured nearly 58 percent of global direct app revenue in 2015, an increase of 36 percent year-over-year. Meanwhile, Apple's share of global app install volume was only 15 percent -- that's down by nearly 8 percent year-over-year.

The sheer volume of Google Android-based devices in use ensures a greater overall number of installs through the Google Play store, which captured about 60 percent of install volume and nearly 36 percent of direct revenue in 2015.

Although Google Play enjoyed solid year-over-year growth in both downloads and direct revenues, the gains were lower than in previous years. Apple is expected to continue outperforming Google Play in terms of revenue generation.

However, both software app ecosystems are more than sufficiently established to attract more developers.