Consumers to spend big on mobile apps
Smartphone users expected to spend $6.2 billion on mobile applications as downloads surpass 4.5 billion this year, forecasts Gartner.
Mobile app stores are likely to get a lot busier this year.
Smartphone consumers will spend $6.2 billion on mobile apps in 2010, forecasts Gartner in a recent report, generating ad revenue of around $0.6 billion throughout the world. Downloads will also skyrocket, exceeding 4.5 billion this year. But good news for app users--82 percent of all apps downloaded will be free.
Last year, mobile app stores kicked up sales of more than $4.2 billion, which includes paid apps bought by consumers and ad-sponsored free apps. On the horizon, Gartner predicts mobile app downloads will shoot past 21.6 billion by 2013, with free apps accounting for 87 percent of all downloads. By that time, mobile app stores may see sales rise as high as $29.5 billion, with ad-sponsored free apps bringing in more than 25 percent of revenue.
"As smartphones grow in popularity and application stores become the focus for several players in the value chain, more consumers will experiment with application downloads," said Stephanie Baghdassarian, research director at Gartner, in a statement. "Games remain the No. 1 application, and mobile shopping, social networking, utilities, and productivity tools continue to grow and attract increasing amounts of money."
But Gartner also expects a changing app market as smartphones come down in price and are consumed by more of the general public. Today, tech-savvy users flock to download the mobile apps they need and have no qualms about paying for them online. Down the road, non-tech types may be more wary of paying for apps, a trend that could pave the way for more ad-generated free apps.
"Growth in smartphone sales will not necessarily mean that consumers will spend more money, but it will widen the addressable market for an offering that will be advertising-funded," said Baghdassarian.
The mobile app market has been dominated by Apple's App Store, which now offers more than 100,000 apps and recently watched the number of downloads top 3 billion. But other players have battled for a share of the mobile app market.
Launched in 2008, Google's Android Market now has around 16,000 apps, according to Google. Last year alone, Palm set up its new App Catalog store, Research in Motion unveiled its Blackberry App World, and Microsoft kicked off its own mobile storefront.
Updated 1:30 a.m. PST to fix typo in number of App Store apps.