Gartner has predicted that consumers will shell out a whopping $6.2 billion on mobile applications and games in 2010.
The research firm also expects mobile downloads to exceed 4.5 billion, while related advertising revenue is likely to hit $0.6 billion worldwide. In addition, Gartner forecasted that worldwide downloads of mobile apps will surpass 21.6 billion by 2013, with free programs accounting for 82 percent of all downloads in 2010 and 87 percent in 2013.
“As smartphones grow in popularity and application stores become the focus for several players in the value chain, more consumers will experiment with appl downloads,” explained research director Stephanie Baghdassarian.
“Games remain the No. 1 application, and mobile shopping, social networking, utilities and productivity tools continue to grow and attract increasing amounts of money.”
Table 1 – Mobile Application Stores’ Number of Downloads and Revenue, Worldwide
Downloads (in M)
Total revenue (in $M)
Source: Gartner (December 2009)
According to Baghdassarian, free mobile applications offer developers the perfect venue to charge for extra features or services.
“There are also applications that are free to use but that charge for physical goods that you can have delivered through the application.
“There are many applications that are free to users and derive their revenue from advertising. This can be done with banners as well as full page advertising between game levels for instance.”
She added that high-end smartphone users tended to be “early adopters” of new mobile applications and more trusting of billing mechanisms, which allowed them to easily pay for apps which met their needs.
However, Baghdassarian cautioned that average smartphone users will become less tech-savvy as the devices come down in price.
“Growth in smartphone sales will not necessarily mean that consumers will spend more money, but it will widen the addressable market for an offering that will be advertising-funded,” noted Baghdassarian.
“The value chain of the application stores will evolve as rules are set and broken in an attempt to find the most profitable business model for all parties involved.”
Gartner’s Carolina Milanesi expressed similar sentiments.
“Application stores will be a core focus throughout 2010 for the mobile industry and applications themselves will help determine the winner among mobile devices platforms.
“Consumers will have a wide choice of stores and will seek the ones that make it easy for them to discover applications they are interested in and make it easy to pay for them when they have to. Developers will have to consider carefully not only which platform to support but also which store to promote their applications in.”