Most apps to be considered financial failures by 2018

13 Jan 2014

Fewer than 1pc of consumer apps will be considered financial successes by their developers, technology analysts at Gartner predicted in a report released today.

The question of freeware vs paid-ware has been a contentious issue with app and game developers, who ask whether a particular model is likely to be better off financially over the course of a number of years.

However, Gartner predicted that by 2018, nearly all apps will become available for free as consumers shy away from paying for apps which are often offered free by its competitors. Consumers are also more likely to download an app through a recommendation from friends and relatives, as opposed to searching manually, meaning a monetised version will likely do nothing more than discourage a download.

‘Hyperactive market’

Vice-president of Gartner, Ken Dulaney, sees the long-term future for apps not as a means of generating revenue, but rather as a means of interactive advertising or directing customers to their business: “Our analysis shows that most mobile applications are not generating profits and that many mobile apps are not designed to generate revenue, but rather are used to build brand recognition and product awareness or are just for fun. Application designers who do not recognise this may find profits elusive.”

Furthermore, according to Dulaney, among the paid applications currently on the market, about 90pc are downloaded less than 500 times per day and make less than US$1,250 a day. As competition increases in the “hyperactive” market by the day, Gartner expect this revenue figure to dwindle even further.

Future developments are also seen in the continuing development of HTML5, which Dulaney predicted will change the smartphone market from a restricted one operating system-only ability to a multi-platform model: “Although more than 100 ‘platform independent’ development tools exist, most involve technical or commercial compromises, such as lock-in to relatively niche technologies and small vendors. This will drive increasing interest in HTML5 as a somewhat standardised, widely available, platform-neutral delivery technology.”

Mobile apps image via Shutterstock

Colm Gorey was a senior journalist with Silicon Republic