In today's market, the smartphone is king of the mobile realm. In fact, smartphones are one of the only growth categories in the mobile sector. One of the selling features that many consumers look for when shopping for smartphones is the availability of apps for the device.
Apple has the most popular and profitable application store around with the App Store for the iPhone/iPod touch, which has racked up 3 billion downloads so far and shows no signs of slowing down.
Research firm Gartner reports that consumers will spend $6.2 billion on mobile apps in 2010. Gartner predicts that 4.5 billion apps will be downloaded in 2010, with 80% of them being free apps. Advertising revenue from mobile apps in 2010 is expected to hit $600 million. Gartner predicts that by 2013, there will be 21.6 billion apps downloaded – free apps are expected to account for 82% of all downloads in 2010 and 87% of all downloads 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 application downloads,” said Stephanie Baghdassarian, research director at Gartner. “Games remain the No. 1 application, and mobile shopping, social networking, utilities and productivity tools continue to grow and attract increasing amounts of money.”
Just because the apps are mostly going to be free doesn't mean that the developer won’t be able to profit from them, however. Developers will use advertising within the app to generate income and some apps will charge for virtual goods or real world goods ordered using them.
“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,” said Carolina Milanesi, research director at Gartner. “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.”