Mobile App Industry to Reach Record Revenue in 2013

SmartphoneThe mobile app industry is booming these days and is only going to get bigger. Gartner is predicting that worldwide revenue from app stores will increase this year by 62%, bringing the total industry revenue to $25 billion dollars.

According to statistics published by Gartner in September 2012, global app store downloads were predicted to exceed 45.6 billion in 2012. Over 89% will be of paid apps (40.1 billion), but paid app downloads were expected to exceed 5 billion downloads. The Apple App Store will have more than 21 billion downloads, an increase of 74% from 2011.

The explosion of the apps industry goes hand in hand with the growth of smartphone sales.  For the first time ever, IDC predicts that more smartphones than feature phones will be shipped worldwide — 50.1 percent of the total mobile phones shipped, or 919 million units.

Apple Remains On Top, But Will That Change?
The apps industry has come a long way since Apple first opened its App Store. Today, it faces strict competition from Google, with its Android OS and Google Play app store. Together the Apple App Store and Google Play offer users over 1.5 million downloadable apps. Analysts say that while Apple and Google are tied in terms of apps offered and apps usage, Apple apps still earn more than three-times as much revenue as their Android app counterparts.

That may change, however. IDC predicts that Android will grow to hold the greatest amount of market share in the mobile app industry — 29.4% in 2011 to 31.1% in 2016 — knocking Windows from the top spot (35.9% in 2011 down to 25.1% in 2016). iOS, which as had 14.6% market share in 2011, is expected to only grow to 17.3% market share by 2016.

The Changing App Industry
Although mobile app usage is dominated by smartphones, they are no longer the all choice these days. Tablets have come out swinging ever since Apple launched its iPad and now there are choices for each major industry player. The Google Nexus, the Microsoft Surface, the Kindle Fire are the best known, but there are dozens of other choices.

The mobile apps industry used to be primarily US based. But now markets in China, Japan and South Korea are getting into the game. Mobile analytics firm Flurry reports that China has outpaced the US in terms of smartphone and tablet users for both Android and iOS.

Flurry also reports that mobile apps users have doubled the amount of time they spend on their apps – from one hour a day in 2011 to two hours a day in 2013. Also, users focus their time on a small number of apps, usually around eight at a time. And app usage shifts rapidly – 63% of apps a consumer uses daily are different from than the apps they used a year ago.

Big app publishers have found ways to become entrenched at the top of both the Apple App Store and Google Play. According to Distimo, a research firm, currently of the top 250 publishers in the Apple App Store, only 2% are newcomers. For Google Play, that number rises slightly to 3%.

App developers are taking steps to respond to these trends. Instead of churning out apps, many developers are focusing on developing a quality user experience and improving the performance of their apps.

Clearly, the mobile app industry is booming and there are lots of opportunities to take advantage of. Let us know how you plan to meet the changing needs of your users in the comments below.'

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