Report: Mobile app demand to explode by 2012

Total value of the worldwide market for apps on the go could grow to $17.5 billion in the next three years, GetJar estimates.

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
Marguerite Reardon
2 min read

Worldwide demand for mobile applications is set to explode in the next three years as the total value of the market could grow to $17.5 billion, according to a new report released Wednesday.

A study commissioned by GetJar, the second largest mobile app store in the world, predicts that mobile downloads will climb to 50 billion in 2012 up from about 7 billion in 2009. This rapid uptick in downloads will generate about $17.5 billion in revenue for the mobile app market. The mobile market was worth about $4 billion at the end of 2009.

"The global market for wireless applications will soon be worth more than the market for traditional music," said Patrick Mork, head of marketing for GetJar. "That's pretty significant when you think the market barely existed a couple of years ago, and now it's expected to grow to more than $17 billion by 2012."

Mobile applications have existed for years, but clunky user interfaces on devices and hard-to-use application stores made it difficult for consumers to download applications. And then came Apple in 2008 with its App Store for the iPhone and iPod Touch.

The iPhone, which was easy to use, coupled with the App Store that allowed users to search and download apps from iTunes, turned mobile applications into an overnight success. Today, the App Store is considered the largest and most successful mobile application storefront out there. It has more than 150,000 apps.

Dozens of companies, from Nokia to Microsoft to Research In Motion, have tried to copy Apple. It's hard to say if anyone will rival Apple's dominance in the application store market. But Yankee Group says that Android has a shot. Google's Android Marketplace already has more than 30,000 apps for phones running the Android operating system.

Carl Howe, a director at Yankee Group and author of a recent report on mobile applications, said in a statement that "strong results from T-Mobile suggest that Android will be the next breakout smartphone app platform."

Much of the growth in the overall mobile application market is due to the growing use of mobile data plans, said Mork. Today, in developed markets such as the U.S., about 25 percent of wireless subscribers have a data plan. But by 2012, about 60 percent of mobile users in the U.S. will subscribe to a data plan. This should come as little surprise given that the nation's largest wireless providers, AT&T and Verizon Wireless, are forcing most customers to upgrade to some kind of data plan, regardless of whether they have a smartphone or not. Data plans are crucial to mobile app growth, because they provide consumers an incentive to download applications.