The App Market Is Heading for an App Store Showdown

11 Comments

Independent, off-deck, app stores will become the major driver of mobile app downloads by 2015, eclipsing on-deck app store. That’s the word of a new report from research firm MarketsandMarkets, which forecasts the growth of the mobile app market.

The report estimates the global market will be worth $25 billion by 2015, with Apple’s App Store (s aapl) accounting for 20.5 percent of total revenues. While on-deck stores like Android Market (s goog) and the App Store represent 3/4 of app revenues, off-deck application downloads are expected to grow faster through independent stores like GetJar and others and will ultimately eclipse on-deck stores by 2015. This is consistent with another report by Chetan Sharma Consulting last year, which forecast that off-deck mobile app sales will eclipse on-deck, operator-managed mobile app sales by 2012. That report was commissioned by GetJar, but the latest forecast by MarketsandMarkets validates that conclusion.

If this holds true, it suggests developers will have to embrace the increasing complexity of multiple app markets. Amazon (s amzn), for example, recently launched a new app market for Android (s goog), joining other markets from carriers such as Verizon Wireless (s vz). While it may mean more work updating multiple apps in various stores, the payoff may be greater for developers willing to wade into various app stores. And as the numbers show, Apple’s dominance in app revenues will subside over time as competing platforms mature into solid revenue makers for app developers. That’s another reason for app developers to look at all their options.

Overall, the consistent theme out of the latest MarketsandMarkets report is that the app revolution is real and only getting bigger. With the Apple App Store hitting 300,000 apps and poised to hit 10 billion downloads, the overall market for apps has shown remarkable growth in the past few years. MarketsandMarkets estimates that mobile apps generated $6.8 billion revenue in 2010 and is expected to grow by 29.6 percent between 2009 and 2014.

The research firm said mobile app downloads grew by 146 percent in 2008 to 1 billion, then jumped to 6.4 billion downloads in 2009. The biggest market for revenue is North America, which had 41.6 percent share in 2009. Asia, however, is the largest market for downloads, while the European market is expected to become the largest market for downloads by 2015.

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11 Comments

iApps

It is definitely an exciting time for app developers as app market grows, but it also comes with the challenge of distinguishing your app from the lot. Vertical markets with special technology that helps users search and discover new and upcoming apps will be key.

Todd R. Levy

Thank you so much for writing on this topic. While these reports and forecasts are very promising, these indie app store must add value to their respective platform in order to be successful and sustainable. “Me too” app stores need not apply!

I am Todd R. Levy and my company, BloomWorlds, is developing Android’s family friendly app store, to help Android parents discover safe, secure, and appropriate apps for their children by utilization our vetted submission process.

Thank you

Red Oak

It would be a complete disaster for Apple if they only had 20% of the revenues in 2015. I’d be interested to see how this analyst came up with the projection

I assume the Apple numbers include iPad and iPod Touch. The former of which Apple should be able to hold onto 50% share for the next 2-3 years. The installed base of iOS alone will be huge

I think this projection if off by 50 to 100%

sguengerich

The real action will be in corporate enterprise stores, some of which may not see the light of day outside of authorized employees & contractors. Necessary to (a) manage multiple devices, (b) multiple security protocols / layers, and (c) federal & regional regulatory requirements.

Morten Jacobsen

The whole dataset seemed old to me. I looked for the date it was written and beware – this is old news. Its Publishing Date is: August 2010
The problem Google have with its store, and Ovi witch recently announced to stop distributing free music – all this are news that point to that Apple have a huge marketshare in mobile apps – and that it will go down to 20% is more than unlikely.

PXLated

Thanks for the research – And, ya, 20% seems way too low considering the considerable lead they have with the whole ecosystem.

Guillermo | Social apps

I think that something new is going to appear in the near future to compete or add more value to the App Stores.
App Stores are nice but it is very difficult for small companies to grow inside of them. I think the new patent that Apple has obtained, that allow to transfer apps from one phone to another via a local P2P, is one of the things that will come soon.
There should be a more decentralized way that also offer the benefits of the App Stores.

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