How Big Is the Apple iPhone App Economy? The Answer Might Surprise You

iStock_000007334181SmallIf I were to tell you that Apple’s app economy was worth more than $2.5 $2.4 billion a year, you would laugh hysterically, shake your head and walk out of the room, yes? Surf on over to some other web site? But here I am telling you exactly that! According to mobile advertising startup AdMob, there are some $200 million worth of applications sold in Apple’s iPhone store every month, or about $2.4 billion a year.

Just to put that in context, Apple says about 1.5 billion apps have been downloaded from the App Store. In comparison, the Android marketplace brings in about $5 million a month or on a run rate to do $60 million in a year, AdMob says. I bet that number rises up sharply once more handsets come to market. As you know, Motorola is announcing its new Android handsets at our Mobilize 09 conference on September 10.

AdMob bases its monthly reports on the usage behavior found on various applications and web sites across its ad network. For the month of July, the report combines AdMob network data with survey results from over 1,000 users of iPhone, iPod touch and Android devices. The result is a broad overview of not only the Apple iPhone app ecosystem, but of Google’s Android-based app marketplace as well.


Why the focus on the iPhone? Because as the report points out, “the iPhone represented 60 percent of U.S. smartphone usage in AdMob’s network in July 2009, followed by RIM and Android devices at 13 and 12 percent, respectively.” Here are some additional findings:

androidiphoneappsjuly2009* Each month, Android and iPhone users download approximately 10 new apps, while iPod touch owners download an average of 18.

* Android and iPhone users download eight new free apps per month vs. iPod touch owners, who download twice as many. The iPod Touch application activity can also be correlated with the sharp increase in Wi-Fi usage from these portable devices, something we’ve noted in recent posts.

* Nearly 50 percent of iPhone users and 40 percent of iPod touch users buy at least one app every month vs. 19 percent of Android-based phone owners.

* iPhone/iPod Touch owners, an average, spend $5 to buy five paid apps every month.

* Given the high number of app downloads, it’s easy to see why nearly half of Android and iPhone users are spending more than 30 minutes every day using them. Nearly a quarter of Android and iPhone users devote a full two hours a day.

The biggest takeaway from this data: People are happy spending money on apps for their smartphones, especially after they’ve had a chance to try them for free.