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There’s an app for that

The rapid growth of the mobile apps market has created new opportunities as well as new challenges, writes GARY SMITH from IFA in Berlin. Nevertheless, app download revenue is expected to reach $29bn by 2015.

The mobile applications market is growing rapidly and will continue to evolve in the coming years, with the addition of new products, players, and business models. While this growth has created new opportunities, it also presents new challenges. The market is flooded, and there is also significant pricing pressure as well as a shift toward free applications, which will necessitate new revenue models. Despite these and other potential hurdles, research company In-Stat is forecasting that mobile application download revenue will surpass $29bn in 2015.

‚Largely spurred by the launch of the iPhone, mobile applications have been a strong growth market over the past several years. The number of applications available has exploded, which has sparked an increasing rate of downloads,‚ says Amy Cravens, Senior Analyst at In-Stat.

‚As the market matures, developers and app stores must take innovative approaches and compete across multiple platforms to attract users. While the market will become more competitive in the coming years, there is a broad base of interested parties with a vested interest in promoting continued market growth.‚

While Apple’s iPad is still dominating the market, Android and Windows Phone 7 are steadily catching up as broader adoption picks up pace, and expansion of their mobile OS installed bases continues to grow. The mobile app ecosystem and market model is also expected to volve with the increasing pool of smartphone and tablet users.

‚Given the vast number of choices available, app developers and app stores need to innovate continually in order to maintain consumers’ interest,‚ says ABI research analyst Fei Feng Seet. ‚For example, an app called OfferedApp promises to provide a paid app each day in exchange for users completing a simple survey or signing up for an offer with advertisers. Some apps also offer virtual currency or other premiums to consumers who download a featured app from the developer. However these new marketing tactics are likely to face opposition as iTunes starts to clamp down on such incentivised promotions when they cut into Apple’s revenue from in-app sales.‚

iTunes is also rumoured to have made modification to its App Store ranking algorithm: the new ranking system takes into account qualitative information such as reviews, on top of download statistics.

According to ABI Practice Director Neil Strother, ‚Appstore browsing on devices has been an issue with users, who can face difficulty finding an app of interest.

Having many ‚misleading’ apps hogging the top of the charts for a week at a time does not help either, so this could not be a better time for Apple to reform its app ecosystem in an environment where competition and consumers’ heightened expectations are increasing the pressure.‚

ABI Research’s Mobile Applications Market Data tracks mobile application downloads and revenues segmented by mobile operating system platform. The database includes historical data and forecasts for application downloads for all major mobile OS’s. It also provides mobile application revenue forecasts, and an overview of the major mobile application storefronts.

· This article is reproduced in Gadget courtesy of IFA International, Official daily news source for international visitors at IFA

* Follow Gadget on Twitter on @gadgetza

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