Mobile app revenue set to soar to $46 billion in 2016

ABI Research says developers and other stakeholders generated $8.5 billion on mobile apps last year, which is a pittance compared to where that figure is expected to go in the coming years.

Mobile app revenue continues to soar. Apps Builder

Mobile app revenue was huge last year, but that'll be nothing compared to where it's expected to go by 2016.

In 2016, total global mobile application revenue will reach an estimated $46 billion, according to ABI Research. That figure, the research firm says, includes pay-per-download, in-app purchases, subscriptions, and advertising. Last year, mobile app revenue hit $8.5 billion, ABI research says.

This year, in-app purchases will likely outpace pay-per-download revenue, but according to ABI Research, the number of people buying content in apps won't grow all that much, potentially putting that revenue opportunity's future in doubt.

Mobile apps are a big business.
Mobile apps are a big business. Screenshot by CNET

"As a revenue model, in-app purchase is very limited today," Mark Beccue, ABI Research senior analyst said in a statement today. "The vast majority of current in-app revenue is being generated by a tiny percentage of people who are highly-committed mobile game players. We don't believe the percentage of mobile game players making in-app purchases will grow significantly, so for in-app purchase revenues to grow, mobile developers other than game developers must adopt it."

Beccue went on to say that Google, which only started allowing for in-app purchasing in its Android Market in July, could help that market grow or hold it back. For now, he says, Google is "literally holding back the growth of mobile application monetization."

Last month, IHS iSuppli reported that in-app purchases accounted for 39 percent of total app revenue last year , and by 2015, that figure should grow to 64 percent, or $5.6 billion.

"In 2012, it will become increasingly difficult for app stores and developers to justify charging an upfront fee for their products when faced with competition from a plethora of free content," IHS analyst Jack Kent said at the time. "Instead, the apps industry must fully embrace the freemium model and monetize content through in-app purchases."

Earlier this month, mobile ad firm Fisku reported that iPhone users downloaded 6 million free applications each day in December.

 

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