The Mobile App Gold Rush Speeds Up
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Executive SummaryIn our September 2009 Yankee Group Report, 'Forecasting the U.S. Mobile App Gold Rush,' we predicted that mobile application download revenue would surpass $4.2 billion in 2013, based ...
Executive SummaryIn our September 2009 Yankee Group Report, 'Forecasting the U.S. Mobile App Gold Rush,' we predicted that mobile application download revenue would surpass $4.2 billion in 2013, based on consumer survey data we collected in the first half of 2009. Now that we have a full year of 2009 survey results, we are revising our forecast. Today, we see:' Both free and paid downloads have accelerated. We now expect that U.S. consumers will download almost 1.6 billion apps in 2010, and that those numbers will swell to more than 6 billion by 2014. Even more impressive, paid app revenue will swell from $1.6 billion this year to more than $11 billion in 2014 (see Exhibit 1 on the next page).' Paid downloads are becoming more popular. Despite conventional wisdom that says apps want to be free, app stores are training consumers that they need to pay a few bucks for quality phone apps. Almost a third of downloaded apps are now paid apps, up significantly from the 18 percent we saw last year.' Apple iPhone subscribers download more apps than other handset owners. Apple's one-click buy and install process has created an app downloading monster. Apple subscribers download an average of 60 apps a year, more than three times the average smartphone owner.' AT&T subscribers lead other users in app downloading. Because of AT&T's three-year-old exclusive deal to carry Apple iPhones, its subscribers on average download 27 apps a year, 42 percent more than the average smartphone owner.' Hard-to-measure Android phones will add growth to the app economy. Because Android is a smartphone OS, not a smartphone manufacturer, we can't directly calculate how much app demand Android users are creating. However, with 60,000 Android phones being shipped every day and nearly 20,000 apps in the Android Market, we believe that Android will be the next breakout app platform. But developers shouldn't tarry; the mobile app gold rush may generate billions of dollars over the next five years, but we can already see a day when app demand will saturate.
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