Warc Blog

App downloads to surge

10 October 2011
GOTHENBURG: App downloads are set to increase rapidly around the world in the next five years, fuelling growth in the subscription and advertising revenues generated through this channel.

Berg Insight, the research firm, estimated the number of apps installed by consumers on wireless devices will grow by 56.6% annually between 2010 and 2015, reaching 98bn a year by the end of this period.

More specifically, the company reported the revenues resulting from individuals paying for these tools, alongside in-app purchases and related subscriptions, hit €1.6bn in 2010.

It predicted the amount delivered by these combined activities should stand at €8.8bn in 2015, equivalent to a compound annual growth rate of 40.7%.

Apple is currently the leading source of income where mobile applications are concerned, with the firm's App Store supplying some €1.3bn last year, a total anticipated to come in at €4.4bn in 2015.

During the same period, Google's Android platform contributed a relatively modest €80m, but is projected to yield €1.5bn by the end of the forecast period.

The Windows Phone operating system manufactured by Microsoft is likely to assume third position in this area by 2015, although the company still has work to do if it is to catch up with Apple and Google.

Elsewhere, Berg Insight reported that in-app advertising was worth €300m last year, or 16% of all application revenues. Ad sales through this channel should be €750m in 2011 and €3.5bn in 2015.

As advertising is expected to be more of a "volume game", Google Android is anticipated to assume a leading role, as the number of handsets utilising this operating system may be more prevalent, while Apple's subscribers remain of higher value.

Overall, Berg Insight argued that Android would provide €1.2bn in ad revenues by 2015, versus only €39m in 2010. Apple's comparative returns are pegged to rise from €230m to €1bn in this period.

Johan Svanberg, a senior analyst at Berg Insight, said: "Most apps are free to download and app monetisation will be a challenge for developers. Free to download monetisation strategies such as in-app advertising and in-app purchasing will be increasingly important."

Geographically, Asia Pacific, which houses the key mobile markets of India and China, is pegged to account for 40% of all app downloads by 2015.

Data sourced from Berg Insight; additional content by Warc staff

 
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