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Why the mobile app economy will keep growing quickly

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Increasing reliance on smartphones will only continue as consumers see mobile apps as the key to help pocketable computers become more central to everyday life. A new PDF report out on Friday from PwC shows that more than half of the 3,282 smartphone owners surveyed use their smartphones for three activities each day: basic communication, accessing news, weather or sports and social network usage. And over the next two years, more than 40 percent of those surveyed expect their activities to increase across 14 different areas, such as travel and healthcare management thanks to apps.

That’s good news for developers and handset makers alike. Hardware makers of smartphones — not that they likely doubted this — know that consumers will keep looking t0 improved devices with more features and performance; especially as they cycle through cellular service contracts and replace old handsets. For programmers, it validates the mobile app economy, even as the industry debates the value of platform-specific software as compared to increasing functionality through HTML 5 and the mobile browser.

Two key aspects in the app-versus-web debate are simplicity and a broad range of functionality; both of which make total sense to me. When I need a specific piece of functionality, I’d rather tap on a dedicated app instead of spending time browsing the web to meet my needs. Respondents to the PwC survey agree:

“There are more and more apps. There’s an app for everything that you do … It makes everything easier.”—Respondent, aged 30–45

“They are quicker and easier. The only reason I ever use a browser is to Google stuff.”—Respondent, aged 21–29

One key area that PwC expects to see growth is in mobile storefront apps due to an increase in consumer comfort with online purchases from a smartphone and poor web-based purchase experiences today. While most survey respondents participate in online commerce — 86 percent in the past year, with 42 percent buying weekly — only a subset of those do so from a smartphone: 52 percent in the past year, but only 12 percent weekly. The main reasons they skew toward buying on a device that’s not a smartphone? Screen size is a hassle for entering payment data, and there are security concerns too.

I expect the security issue to disappear over time as the younger generation, already more comfortable with sharing information and making mobile purchases, grows up. And applications will help too: One survey participant made specific note of how easy it is to use the Starbucks (s SBUX) Mobile app to buy goods in the store. As an avid user of the same app, I concur. If I had a greater number of similar apps in addition to a digital wallet of sorts for my credit cards, I’d be apt to leave my physical wallet behind.

Given consumer preferences for single-purpose, focused apps, there’s no reason to think that earlier predictions of 44 billion mobile apps downloaded by 2016 won’t hit the mark. In fact, given the uptake of smartphones from current feature phone owners, combined with reliance upon the handheld devices and improving mobile broadband networks, 44 billion downloads is starting to look conservative from where I stand.

7 Responses to “Why the mobile app economy will keep growing quickly”

  1. mschmidlen

    We already have approaching a BILLION apps in the mobile ecosystem (granted a number are duplicated across multiple platforms, HOW is this a sustainable business model for the developer community (or for anyone other than Apple)???

    • Great question that’s worth watching the app economy for. I don’t know how long such growth is sustainable, but due to the variety of activities and functions needed by the billions that will have a smartphone over the next several years, I think there’s still huge opportunity for the developer community because we haven’t yet come close to exhausting ideas or needs for specialized apps. Devs that are forward thinking — instead of “appifying” old functions from the web and such — could lead the pack for innovation and profit IMO.