Mobile App Revenues – Trends and Future
It is almost fascinating to realize the extent of growth of the mobile application industry. Since its inception, the mobile application industry has spread like wildfire and has taken the world of technology by storm. However, the overwhelming expanse of this huge venture, housing almost every aspect of our daily lives, incites several thoughts. Where does this industry go to, from where it is now? Has it reached its pinnacle? What does it offer for a new investor, planning to make ground, or even for a group of newbies, hoping for the likes of a successful startup?
Evidently, the app business has matured extensively and has become the part and parcel of the economy itself. This fact, beyond any doubt, proves that this industry still has a lot to offer in terms of, both, revenue and innovation. According to International Data Corporation (IDC), the mobile app revenue remains healthy despite slowing download volumes and smartphone growth. Mobile device users installed nearly 156 billion mobile applications worldwide in 2015, generating a staggering amount of $34.2 billion in direct revenue. IDC also estimates that these figures would grow to more than 210 billion installs and nearly $57 billion in direct revenue in 2020. While the market is expected to grow steadily during this period, IDC expects to see slower growth in both application install volumes and direct revenue over time. This trend, largely driven by market maturation, will see annual install growth fall dramatically. However, mobile application install volume will still experience a five year compound annual growth rate of 6.3%. Meanwhile, direct revenue from mobile applications will also experience slower growth by the end.
The app revenue is directly influenced by the existing devices in the market that the apps can run on. The hardware popularity, of a device, and the adoption rate always leads to the software’s growth as well. The mobile app market is predicted to see massive growth over the next few years than it has since its origin. Global smartphone markets are still growing at a steady pace due to the widespread adoption in the emerging markets. However, app saturation and increasing user acquisition costs in mature markets, will lead to a noticeable deceleration in download volumes of applications.
For the iOS platform, the biggest increase in the revenue growth was first witnessed first in 2012. The explanation to this growth is fairly simple. With the introduction of the Apple iPhone 5, the first model with a bigger screen, better resolution support and an overall powerful device, led to the increase in the worldwide usage of the device, and in turn an increase in the popularity of the iOS. With such a device in the market, there was introduction to new kind of apps which wholly utilized the device and resulted in better user experience. This facilitated rapid growth in app revenues. Similarly, with the release of other devices, such as the successive models of the iPhone, iPad, Apple Watch, etc., has fueled the revenue growth. Apple’s App Store captured nearly 58% of the global direct app revenue in 2015, with an increase of 36% year over year. Meanwhile, Apple’s share of global app install volume was only 15% down nearly 8% year over year. There are high expectations for iOS Enterprise penetration increase in the coming years, which is currently low. But, Apple’s partnerships with IBM and CISCO promises to change it in future.
On the android side, the app revenue growth is associated with its potential to grow in India, Europe and South America and potential for android to grow in Africa as well, where mobile devices, primarily, provide people, access to the Internet and android is the leading platform to support it. The sheer number of android-based devices in use ensures a greater overall number of installs through Google Play, which captured about 60% of install volume and nearly 36% of direct revenue in 2015.
It is pretty clear now that, even though the download volume of applications and smartphone growth tends to slow down with time, the app revenues remain existent. Obviously, the revenues aren’t the same at every period of time. The fluctuation is coherent with the duration of the app in the market. When a new app is launched, the revenues shoot up whereas they’re likely to decrease when the app has aged enough in the market. This is due to factors like other competitive apps in the market, the adaptability of the application, the preference of the user, etc. The revenue generated from a certain app is also dependent on the innovativeness and capability of the app. Apps so developed, that match the requirements of the user and are convenient to use, gain popularity among the users which results in better returns. On the other hand, poorly developed apps struggle to even remain in the market, from the day they’re launched.
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https://www.codeyeti.com/appdevelopmentblog_details.php?blogtitle=Five_Deadly_Sins_for_Your_StartUp!