The global mobile applications market is forecast to reach $17.5 billion by 2012 and surpass the market for CDs, which is projected to reach $13.8 billion*during the same period, according to GetJar.
Mobile apps downloads across all types of handsets are projected to increase from over 7 billion downloads in 2009 to almost 50 billion in 2012, up 92% year over year, the study forecasts.
Below, additional findings from the GetJar study:
Poised for Growth
Off-deck (outside the carrier deck) paid-for apps will account for largest portion of revenue increases—almost 50% of all applications sales in 2010. In 2009, by comparison, on-deck apps available from mobile operators accounted for over 60% of all apps revenue; that proportion will fall significantly to just under 23% by 2012.
The number of applications stores increased to 375% in 2009, to 38 stores from 8 a year earlier, and more growth is expected in 2010.
Advertising-based revenue models are gaining traction: Advertising contributed almost 12% of the overall apps revenue in 2009. However, that share is expected to more than double to over 28% by 2012—taking into account the high proportion of prepay users in developing markets.
The average selling price of applications was approximately $1.90 in 2009. That level is projected to fall 29% over the next three years, even as advertising revenue derived from apps is likely to stay relatively flat.
App Markets Developing Worldwide
There is significant opportunity for both high-end smart phones (e.g., BlackBerry and Android-powered handsets) and feature phones (e.g., Samsung Instinct/Jet and Nokia X6) with apps markets evolving differently across geographic regions, the study finds.
Overall, feature phones accounted for 90% of handsets in use worldwide in 2009, while smartphones and data cards accounted for the remaining 10% of the market. In North America, however, uptake of smart phones was much higher (over 20%) than other regions (3% in Middle East/Africa).
The line between powerful feature phones and smartphones is blurring as consumers demand powerful yet cost effective devices, effectively expanding the apps revenue opportunity across a much broader range of handsets, GetJar said.
Key international apps market-related findings:
- The average application selling price (ASP) in North America was $1.09, significantly higher compared to ASPs in developing markets such as South America ($0.20) and Asia ($0.10).
- Post 2012 app downloads in developing regions such as Asia may eventually exceed those in Western regions, although monetization of these downloads would require different business models (e.g., advertising, virtual currency) than those seen in developed markets.
- Apps revenues in Europe are forecast to increase to $8.5billion in 2012, from $1.5billion in 2009, while revenue in North America will increase from $2.1 billion to $6.7 billion in 2012.
- Mobile apps are most popular in Asia, with the region accounting for 37% of global downloads in 2009.
- Although Asia had the highest number of apps downloads, users in North America spent the most money on apps, accounting for over 50% of revenue.
*According to the world music trade body IFPI (International Federation of the Phonographic Industry), April 2009.
About the data: Findings are from a study conducted by Chetan Sharma Consulting on behalf of apps store GetJar. The study focused on the mobile applications market across five major regions: North America, Europe, South America, Asia, and the Middle East and Africa. To create a framework for analysis, Chetan Sharma Consulting built a model that took into account how the overall apps consumption is evolving across various dimensions: on-deck (offered on carrier deck), offdeck (outside the carrier deck or offering though they still might play a role like in billing or marketing), smartphones, feature phones, paid, free, advertising-based, and virtual-goods-based.
