Wednesday, May 04, 2011

2011 Revenue from Mobile-App Sales May Be $3.8B

Analysts expect revenues generated by the world's top four mobile Relevant Products/Services-application stores to grow 77.7 percent this year to $3.8 billion. Apple's App Store alone is expected to generate $2.91 billion for 63.4 percent year-over-year growth, according to IHS Screen Digest, which recently acquired iSuppli.

The continuing popularity of the iPhone, iPod touch, and iPad is likely to preserve the Apple App Store's mobile-app leadership though 2014. By then, however, Apple's market share Relevant Products/Services will have declined to 60 percent in a growing market, IHS researchers predict.

Growth at Google's Android Market is expected to outpace the market this year, with growth at Research In Motion's BlackBerry App World likewise expected to exceed Apple's growth. "With consumers continuing to show robust, unflagging interest in downloading games and other applications to devices like smartphones and tablets, collective revenues from the four stores will climb sharply this year," said IHS analyst Jack Kent.

Tablet Strategies

Gartner estimates that Apple's App Store drove close to nine application downloads out of 10 in 2010. The App Store is also expected to remain the single best-selling store through 2014 -- "although to a lesser extent, as other stores manage to gain momentum," said Gartner Research Vice President Carolina Milanesi.

The huge popularity of Apple's iPad is one big reason why the iconic device maker will be able to maintain its mobile-app sales leadership. "While the average number of downloads per device onto a smartphone will remain stable as the market grows, it must be assumed that media tablets will drive more downloads from consumers, boosting the overall average downloads per device," Milanesi observed.

This explains why this year's introduction of Android and RIM tablet platforms are so important. In RIM's case, the strategy "is to be the unwalled garden of the app space by investing in a variety of different platforms, [which] is a unique approach," noted Al Hilwa, director of applications development software Relevant Products/Services at IDC.

The execution for RIM's approach is harder and requires more R&D spending, Hilwa noted. "But the multiple development models such as Flash, Java, C/C++, Android [and] game frameworks make this a universal application platform that has the potential to become the first open tablet platform," he added.

Open mobile platforms let consumers share the same experience across devices as well as apps, settings or game scores, Milanesi observed. "At the same time, tablet users who don't own a smartphone could be prompted to adopt one to be able to share the experience they have on their tablets," she said.

Android App Growth Soars

Though BlackBerry App World is expected to enjoy 69.2 percent growth this year, it won't be good enough to let RIM keep the second spot behind Apple's App Store it had last year. According to IHS analysts, that's because revenue at Google's Android Market is forecast to soar 295.4 percent to $425.36 million this year.

Revenue at Nokia's Ovi Store is forecast to reach $201.48 million. But with Nokia planning to introduce new smartphones based on Windows Phone 7 by the end of this year, the long-term prospects for the Ovi Store are not clear.

IHS noted that mobile-download revenue from games and other applications is projected to rise to $5.6 billion in 2012, $6.9 billion in 2013, and $8.3 billion in 2014. This is one area in which Microsoft's fledgling Windows Phone Marketplace might be able to gain enough traction to shake up the market, the firm's analysts said.

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