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Mobile Phone Apps to Transform Business Models

The mobile phone applications market continues to grow. According to the latest market study by Generator Research, in 2015 over 255 million people worldwide will have downloaded and used mobile applications -- which represents about 22 percent of the worldwide smartphone user base.

Meanwhile, the revenue from mobile applications -- including in-app payments -- will grow to over $23 billion in less than five years.

By way of comparison, according to IFPI -- the recorded music industry trade group -- the value of worldwide sales of recorded music in 2009 was $17 billion. The modern mobile applications market is only 5 years old, whereas the recorded music industry is over 100 years old.

Although the mobile application market was pioneered in the late 1990s by companies like Nokia, the adoption was limited to mobile-savvy users who were prepared to spend time working around the technical intricacies and clumsy user interfaces typical of early smartphones.

However, the launch of the iPhone in June 2007 -- and the introduction of the Google Android mobile phone operating system in November -- were the keys that provided access to the mass market.

While the iPhone raised the competitive benchmark for smartphones, Android provided rival handset vendors with a high-quality operating system that had been designed specifically for smartphones, and at no cost to the handset vendor.

The ensuing wave of competitive activity has produced a range of attractive smartphones that are generally equipped with large, high-resolution, touch-enabled screens and are better optimized for browsing the web.

Consumers are now beginning to use their phones for more than making voice calls and sending text messages. And, one of the most important new usage patterns is the download and customization of mobile applications.

Strongly adopted by both the consumer and enterprise segments, and seeing impressive uptake in both developed and emerging markets, mobile applications are transforming the mobile industry and their associated business models.

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