Buzzin Mobiles

An independent report conducted on behalf of the worlds second biggest (to Apple iTunes) mobile app store Getjar, predicts that the global market for apps will be worth more than the CD market by as soon as 2012.

Mobile app downloads across all types of handset are expected to increase from over 7 billion downloads in 2009 to almost 50 billion in 2012 – a year on year growth rate of 92%, creating a global market worth $17.5billion.

In comparison the CD market for 2012 is predicted at being worth only $13.83billion.

To understand the potential of the “global mobile apps economy,” GetJar commissioned independent consulting firm Chetan Sharma Consulting to lift the lid on the rapidly expanding global apps market. The aim of the project was to analyse the potential and real value of the mobile apps market worldwide, using first hand data.

It is clear that by 2012, off-deck paid-for apps will be the biggest revenue generator, accounting for almost 50 per cent of all apps revenue. By comparison, in 2009, on-deck apps available from mobile operators accounted for over 60% of all apps revenue, but this will fall significantly to just under 23% by 2012.

The study outlines opportunities for both high end smart phones (such as BlackBerry and Android powered handsets) and feature phones (such as the Samsung Instinct/Jet and Nokia X6). In 2009, 90% of handsets in use worldwide were so-called feature phones, while smart phones and data cards accounted for the remaining 10% of the market. In some regions such as North America, uptake of smart phones was much higher (over 20%) than other regions (3% in Middle East/Africa). The line between powerful feature phones and smart phones is blurring as consumers demand powerful yet cost effective devices – effectively expanding the apps revenue opportunity across a much broader range of handsets.

In terms of revenue, Europe appears to be the area where most growth is predicted, rising from the current (2009) figure of $1.5billion, to $8.5billion in 2012. In North America a rise from $2.1billion to around $6.7billion is predicted.

Currently apps are most popular in Asia, with the region accounting for 37% of global downloads in 2009. However, while Asia had the highest number of downloads, users in North America spent the most money on apps, accounting for over 50% of revenue.

Other findings from the research include:

• Advertising based revenue models have become increasingly popular. In 2009, advertising contributed almost 12% of the overall apps revenue. However, this share is expected to more than double to over 28% by 2012 – given the high proportion of prepay users in developing markets.

• The battle of the app stores is well underway – in 2009 the number of app stores leapt from eight to 38 – an increase of 375%. The number of app stores is expected to further increase in 2010.

• The price of mobile applications can vary from $0.99 to $999, however the average selling price in 2009 was approximately $1.9. This is predicted to decrease by 29% over the next three years, although advertising revenue derived from apps is likely to stay relatively flat.

Despite the huge increase in the value of the market, Getjar believe that the next two years will see the survival of the fittest in the mobile app market and surprisingly predict that the massive revenue forecast will be shared amongst just a handful of businesses.