Mobile App Store Revenue to Reach $15B in 2011

Analyst firm Gartner has forecast that worldwide mobile application store downloads will reach 17.7 billion downloads in 2011, a 117 percent increase from the estimated 8.2 billion downloads in 2010.

This will generate around $15bn, according to Gartner's estimates, which represents a 190 percent increase on 2010's revenue of $5.2bn. The revenue will be generated by both end users buying applications and applications themselves generating advertising revenue for their developers.

Gartner's estimates come on the back of a separate report issued this week by IDC that predicted that many apps with a cheap, one-time cost could be replaced by apps that bring in advertising dollars or drive recurring revenue based on usage or a subscription fee.

By the end of 2014, Gartner forecasts that over 185 billion applications will have been downloaded from mobile app stores, since the launch of Apple's App Store in July 2008.

"Many are wondering if the app frenzy we have been witnessing is just a fashion, and, like many others, it shall pass. We do not think so," said Stephanie Baghdassarian, research director at Gartner.

"We strongly believe there is a sizable opportunity for application stores in the future. However, applications will have to grow up and deliver a superior experience to the one that a web-based app will be able to deliver. Native apps will survive the web enhancements only when they will provide a more-personal and richer experience to the 'vanilla' experience that a web-based app will deliver."

Gartner still considers Apple's iOS to be the clear market leader in terms of app platforms, though this dominance is likely to be eroded over the coming years.

"We estimate that Apple's App Store drove close to nine application downloads out of 10 in 2010 and will remain the single best-selling store across our forecast period (through 2014), although to a lesser extent, as other stores manage to gain momentum," said Carolina Milanesi, research vice president at Gartner.

Milanesi predicted that the media tablet sector, currently dominated by the iPad according to recent figures from IDC, would drive app downloads in the next few years.

"While the average number of downloads per device onto a smartphone will remain stable as the market grows, it must be assumed that media tablets will drive more downloads from consumers, boosting the overall average downloads per device," she said.

For comprehensive coverage of the Android ecosystem, visit Greenbot.com.

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