Global Mobile App Stores Market 2013 – Explosive growth continues till 2017

IT research firm Gartner estimated that worldwide Mobile app stores revenues to reach $26 billion in 2013 compared to $18 billion in 2012 and annual downloads will reach 102 billion in 2013, up from 64 billion in 2012. 91% of total downloads are Free apps and in-app purchases (IAPs) accounts for 48% of app store revenue by 2017, up from 11%in 2012. There is a linear relationship between the apps download and the sales of new mobile devices as the customers who buy new mobile phones definitely download apps and as the mobile buying cycle slows down so does the mobile apps downloads. The industry is expected to continue its explosive growth in future also due to upgrading of mobile networks from 2G to 3G to 4G which will increase the speed of internet and data downloads on the mobile phones and also the mobile phone manufacturers launching more and more devices with powerful processors, touch screens, increase in display screen sizes and finally developers developing more apps.

Apple iOS and Google Android app stores combined are the dominant players in this market and are forecasted to account for 90 percent of global downloads in 2017. Key reason for their dominance is their advanced ecosystems and active developer communities. Free apps currently account for about 60% and 80% of the total available apps in Apple's App Store and Google Play, respectively. Gartner Research highlights IAP is a major revenue contributor to Apple’s App Store revenue fueled by the increasing numbers of iPhones and iPads. Other platforms including Android and Microsoft stores have not been able to monetize their apps, but analysts expect they will also see IAP contributions increase in the future.

	2012	2013	2014	2015	2016	2017
Free Downloads	57,331	92,876	127,704	167,054	211,313	253,914
Paid-for Downloads	6,654	9,186	11,105	12,574	13,488	14,778
Total Downloads	63,985	102,062	138,809	179,628	224,801	268,692
Free Downloads %	89.6	91.0	92.0	93.0	94.0	94.5

Source: Gartner (September 2013)

Email and calendaring (46%), Instant Messaging (IM) (37%), and office & personal productivity (26%) are the three most popular uses of mobile applications today according to Gartner survey. CRM, at 19%, and ERP, at 17%, have been predicted to grow the fastest of all enterprise applications on the mobile over the next three years. Mobile apps are no longer a consumer phenomenon and there has been an increase in adoption by enterprise companies and are developing and launching mobile apps. Apps are being used to engage with both the consumers and employees. Smartphones sales are increasing and the companies are adopting the bring-your-own-device (BYOD) will also fuel the enterprise apps growth. But challenges remain for the App stores in terms of monetizing the applications and increasing their revenues. Customers are not inclining to pay for apps and making them pay is the biggest challenge for the industry.