Feature Article

September 19, 2013

Mobile App Store Should See 102B Downloads in 2013

In the past year we have seen the amount of mobile downloads double and triple. For the holiday season last year, smartphones and tablets were the big sellers. This led to all records being broken with the amount of apps that were downloaded on Christmas day. By the end of the year over 60 billion apps were downloaded.

According to a new report from the Gartner Group, we could be looking at just less than double that amount by the end of this year. The numbers that the report lists are 64 billion for 2012 and an estimated 102 billion by the end of 2013. This will raise the total revenue by $8 billion to $26 billion for this year.

While revenue will go up, it seems that a great percentage of the downloaded apps will be free. Free apps will account for about 91 percent of the total. Slightly less than half will be coming from in-app purchases (IAPs) by 2017. About 48 percent, which is an increase of 11 percent from 2012 is expected in the next few years.

A breakdown for the next four years can be seen in the following chart from Gartner:

Table 1, Mobile App Store Downloads, Worldwide, 2010-2016 (Millions of Downloads)

 

2012

2013

2014

2015

2016

2017

Free Downloads

57,331

82,876

127,704

167,054

211,313

253,914

Paid-for Downloads

6,654

9,186

11,105

12,574

13,488

14,778

Total Downloads

63,985

102,062

138,809

179,628

224,801

268,692

Free Downloads %

89.6

91.0

92.0

93.0

94.0

94.5

Source: Gartner (September 2013) 

IAP purchases will most likely have strong growth this year with 17 percent of the store revenue. It should also be strong in 2014, but will then taper off and slowdown in later years. Gartner sees the cause of the slowdown due to smart devices reaching more mass market consumers whose willingness and/or affordability to spend on IAPs is lower than early adopters.

Sandy Shen, research director at Gartner, said, "We expect strong growth in downloads through 2014, but growth is forecast to slow down a bit in later years. The average downloads per device should be high in early years as users get new devices and discover the apps they like. Over time they accumulate a portfolio of apps they like and stick to, so there will be moderate numbers of downloads in the later years." 

According to the research, IAP contributes to a significant amount of Apple's App Store revenue from iPhones worldwide. Although other platforms have not reached Apple’s level analysts expect they will also see IAP contributions increase in the future. 

Brian Blau, research director at Gartner said Free apps currently account for about 60 percent and 80 percent of the total available apps in Apple's App Store and Google Play, respectively. iOS and Android app stores combined are forecast to account for 90 percent of global downloads in 2017. These app stores are still increasingly active due to richer ecosystems and large and very active developer communities. However, we expect average monthly downloads per iOS device to decline from 4.9 in 2013 to 3.9 in 2017, while average monthly downloads per Android device will decline from 6.2 in 2013 to 5.8 in 2017. This relates back to the overall trend of users using the same apps more often rather than downloading new ones."

Blau went on to say, "We see that users are not put off by the fact that they have already paid for an app, and are willing to spend more if they are happy with the experience. As a result, we believe that IAP is a promising and sustainable monetization method because it encourages performance-based purchasing; that is, users only pay when they are happy with the experience, and developers have to work hard to earn the revenue through good design and performance." 

With so many new devices coming out this year, especially around the holidays, it will be interesting to see how this year compares to Christmas day 2012.




Edited by Alisen Downey


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