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Mobile app revenue to explode by 1,000 per cent

A new Gartner report claims mobile app revenue is set to surge in the next three years.

Applications

Worldwide revenue for mobile application stores has been predicted to grow up to a 1,000 per cent between by 2014, according to a new report.

Analyst firm Gartner estimated the $5.2 billion (3.3 billion) revenue of this past year would rocket up to $58 billion in the next three years and the number of downloads would reach an unprecedented 17.7 billion a 117 per cent increase from the total downloads in 2010.

Stephanie Baghdassarian, research director at Gartner, didn't think the exponential rise in applications' downloads was just a fashion.

"We strongly believe there is a sizable opportunity for application stores in the future," she said.

However, she added, applications would have to develop to a point in which they provide a superior experience to the one that web-based apps will be able to deliver.

Although free applications are still unarguably the most popular amongst users, there has been a relative decrease in relation to those applications for which users are willing to pay. At the moment 81 per cent of downloaded apps were free of charge, a percentage Gartner said would continue to decrease.

The current average split of the revenues app stores generate is about 70/30, with 70 per cent going to the developer and the remaining 30 per cent going to the store owner.

Gartner predicted, by the end of 2014, advertising would be generating a little under a third of the revenue produced by application stores - going up from 16 per cent in 2010.

Gartner also pointed out the Apple App Store's competitors were gaining some traction.

Among the rivals growing to challenge Apple's supremacy, Gartner cited the Android Market, Nokia's Ovi Store, Research In Motion's (RIM's) App World, Microsoft Marketplace and Samsung Apps.

"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.

By the end of 2014, Gartner forecast over 185 billion apps would have been downloaded from mobile app stores, since the launch of the first one in July 2008.

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