Mobile App Market to Triple by 2015

June 11, 2010

The global market for mobile applications is expected to more than triple from just under $10 billion at the end of 2009 to $32 billion in 2015, according to [pdf] a new white paper from Juniper Research.

VAS Accounts for Majority of Mobile App Revenues
Mobile application revenues consist of ad spend, value-added services (VAS, including “freemium” and subscription), and pay-per-download (PPD). Currently VAS produces about half of global mobile app revenues, with PPD accounting for slightly less and ad spend representing the remaining tiny fraction.

juniper-mobile-apps-june-2010.jpg

During the next five years, VAS, PPD and ad spend will continue contributing to total global mobile application revenues in that descending order. However, the amount of revenues VAS produces will roughly quadruple, while PPD revenues will remain essentially flat and ad spend revenues will also roughly quadruple.

Apple Drives Mobile App Growth
The total number of mobile applications downloaded from the Apple App Store to Apple iPhone and iPodTouch devices quadrupled from 1 billion in April 2009 to 4 billion in April 2010. iPhones represented less than 1% of the total mobile device install base in April 2009, yet accounted for around 35% of mobile application downloads.

In addition, only 50% of the applications downloaded from the App Store have been games, helping drive growth of other types of applications with the remaining 2 billion downloads.

Apple-centricity Poses Challenges
Although the App Store’s domination of the mobile application market has helped spur growth, it also poses several challenges, as addressed in the following chart:

juniper-mobile-apps-apple-challenges-june-2010.jpg

Games Most Popular Mobile App
Games are the most popular mobile application with both US smartphone and feature phone users, according to “App Playbook” data from The Nielsen Company. Overall, 14% of mobile phone users have downloaded an application in the past 30 days. Games were the most frequently downloaded application by all users, downloaded by 65% of past-30-day smartphone downloaders and 59% of past-30-day feature phone downloaders.

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