Mobile app revenues skyrocket to $30B market

ABI Research suggests pay-per-downloads, in-app purchases and other forms of monetization are turning apps into money for developers

Individual developers may feel like it's an uphill battle trying to get consumers to open their wallets, but taken as a whole, the market for mobile apps has grown an unprecedented amount.

According to ABI Research's most recent market data, the cumulative revenue base made from pay-per-downloads, in-app purchases, subscriptions and in-app advertisements will pass $30 billion by the end of 2012--nearly double the growth of 2011.

ABI Research's data comes a few weeks after a slightly longer-term forecast by Strategy Analytics, which said mobile app revenues will reach $35 billion by 2017. Strategy Analytics predicted in-app advertising will drive the majority of the growth starting as early as next year, but ABI Research suggested that the app store vendors play an even more critical role in helping to spur monetization.

"The catalyst behind the quest of turning apps into money has been Apple [(NASDAQ:AAPL)], which not only came up with a compelling OS, but also with well-executed distribution and billing mechanisms," ABI said. Google (NASDAQ:GOOG) Play was also highlighted as significantly improved--ABI described it as moving from something that resembled a garage sale to a "respectable department store" in the past year. "We estimate the Android developers' share of the annual app revenues to set around one-third."

Mobile App Revenues - ABI Research
Source: ABI Research

A big part of that Android space may be in mobile gaming. The Institute for Information Industry's Market Intelligence and Consulting Institute in Taipei recently estimated that global revenues for mobile gaming will reach $15 billion by 2015. The majority of Android-based game revenue will come from ads, the Institute said, while iOS apps will be monetized by paid downloads. This could be because, broadly speaking, ad rates for iOS apps have been much higher than those for Android, at least until recently.

Given the number of app developers who create apps as a hobby with only dreams of ever eking out a profit, however, the ABI Research study could be seen as an encouraging sign that the so-called "appreneur" economy is becoming a reality.

"We're no longer talking only about a short-term gold rush. Apps have become a major digital industry," ABI said. "Consumers' high interest in apps has for a long time been obvious from download volumes, but it's 2012 that will go down in history as the year when the economic side of the business finally took off."

For more:
- read the full report

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