In-app purchases will drive app revenue to US$75bn by 2017 – report

15 Aug 2013

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Image via iQoncept/Shutterstock

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Spending on consumer apps will reach more than US$75bn in 2017, largely due to in-app purchases as opposed to initial download costs, Juniper Research’s latest report on Future App Stores has forecast.

The ‘freemium’ model has proved popular with app developers, where apps can be downloaded for free but other add-ons and additional content within the app will come at a cost.

By 2017, Juniper reckons that the cost of downloads will contribute to almost a quarter of the total US$75bn revenue, with the rest coming from in-app purchases. Games, the most popular category of app, will account for almost one-third (32pc) of the total revenue.

Developers at the cutting edge of the market, Juniper reports, have managed to monetise their user base completely through a combination of advertising and in-app purchases.

As tablet usage increases, so too will revenue from these users, which is expected to jump from US$7.8bn in 2013 to US$26.6bn in 2017.

Growth in app downloads will also come from deals secured by app stores so that customers without a credit or debit card for purchases can have these costs billed to them by their operator.

Juniper foresees that the titan app stores from Google and Apple will see greater competition from the likes of Microsoft and Amazon. This intensifying competition is expected to lead to new features being added to app stores to improve search and discovery.

Apps image by iQoncept via Shutterstock

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Elaine Burke is managing editor of Siliconrepublic.com

editorial@siliconrepublic.com