Revenues from app downloads to reach US$26bn in 2013

23 Sep 2013

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This year more than 102bn apps will be downloaded from the various app stores, netting revenues of US$26bn – up from US$18bn in 2012 – according to Gartner.

Gartner said in-app purchases (IAPs) will account for 48pc of app store revenue by 2017, up from 11pc in 2012. 

“Free apps currently account for about 60pc and 80pc of the total available apps in Apple’s App Store and Google Play, respectively,” said Brian Blau, research director at Gartner.

“iOS and Android app stores combined are forecast to account for 90pc 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 said.

After strong growth IAPs will eventually slow

gartner

As with downloads, IAP is expected to have strong growth in 2013 and 2014 and slow in later years.

This is due to smart devices reaching more mass-market consumers whose willingness and/or ability to spend on IAPs is lower than early adopters. Nevertheless, IAP will become a major monetisation method for apps stores and developers. 

Research shows that IAP contributes to a significant amount of Apple’s App Store revenue from iPhones worldwide. Other platforms have not reached such high levels as the iPhone, but analysts expect they will also see IAP contributions increase in the future. 

“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,” Blau said.

“As a result, we believe that IAP is a promising and sustainable monetisation 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.”

Apps image via Shutterstock

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Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com