Mobile app store revenues to jump 77pc to US$3.8bn

4 May 2011

Combined revenues from the four major mobile application stores run by Apple, Google, Nokia and Research In Motion (RIM) will leap 77.7pc in 2011 to US$3.8bn, with the Apple App Store projected to eat up a gargantuan three-quarters share of the total market, according to new IHS Screen Digest research.

“With consumers continuing to show robust, unflagging interest in downloading games and other applications to devices like smartphones and tablets, collective revenues from the four stores will climb sharply this year,” said Jack Kent, analyst, mobile media, for IHS.

Combined revenue for the four stores in 2011 will rise from US$2.1bn in 2010 and from US$830.6m in 2009. Application store revenues were first tracked in 2008 in a market worth just US$206.01m, with the Apple App Store the only viable presence at that time.

Total download revenue from games and other applications are projected to continue rising in the next few years, jumping to US$5.6bn in 2012, US$6.9bn in 2013 and US$8.3bn in 2014. The four app stores are the major players at present in the field, but other sites, such as Microsoft’s Windows Marketplace, conceivably could gain enough size and presence in the future to shake up the market.

Apple App Store to account for three-quarters of market

To no one’s surprise, the Apple App Store continues to head off all competition. Projected figures for the Apple App Store this year call for revenue of US$2.91bn, up 63.4pc from US$1.78bn in 2010. Given that Apple devices such as the iPhone, iPod and iPad are the market leaders in their field, the company’s App Store is expected to take in 76pc of revenue this year and retain 60pc market share by 2014, despite efforts by the other stores to match Apple’s ability to monetise its users, IHS believes.

Apple also will lead the way with revenue gained from in-app purchases – or additional purchases made within a paid application, such as bonus game levels – which will serve as a key growth driver for revenue up to 2014.

Google Android Market on the rise

Making a serious bid for consumer dollars, however, is Google’s Android Market, which will see the fastest growth in 2011. Android Market revenue will soar 295.4pc this year to US$425.36m, on its way to become the second-largest application store.

The ascension of Google Market to runner-up position means a fall in ranking for last year’s second-place finisher, Research In Motion (RIM). This year, the BlackBerry App World will finish third with expected revenue of US$279.11m. Despite 69.2pc growth in 2011 that will rival Apple’s App Store revenue expansion, BlackBerry App World will have the fewest downloads, numbering about 772.2m, compared to a staggering 10.3bn downloads for the Apple App Store and 5.8bn downloads for Android Market.

In last place this year will be the Nokia Ovi Store, with US$201.48m in anticipated revenue and 1.1bn downloads from Nokia’s Symbian smartphone users.

Both the RIM and Nokia app stores will continue over the next few years to be relegated to the two lower positions as Apple and Google remain the dominant players, IHS Screen Digest figures show.

The total number of downloaded applications in 2011 is expected to reach 18.1bn by year-end, compared to 9.5bn last year, 3.1bn in 2009 and 419.2m in 2008. By 2014, downloaded applications will top some 33bn.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years