This document discusses approaches to estimate the market size for food apps. It analyzes the total app market and estimates that food apps account for $207 million in revenues in 2012 using a top-down approach. A bottom-up approach estimates the value of mobile ads in the lifestyle category is $10 million. The document concludes that while the food app market is growing, it is still relatively small and young, so alternative revenue streams beyond conventional monetization need to be explored.

1. eMealy
Market Size
Estimation

2. How much money is flowing
in the food app market?
Two approaches to estimate the market size :
 Top-Down approach: Get an estimate of the
total market size and narrow down to the
food market. This will give us the available
market.
 Bottom-Up approach: Estimate how much a
food app can make from ads, building
on assumptions for CPM and number of
views. This will give us an estimate of the
attainable market.

3. The total app market in 2012 will be
worth $22 billion
Top-Down : How to monetize a mobile app?
 The standard forms to monetize a 70000
62600
mobile app are: app sale, premium
60000
services and ads
50000
 We researched the market size for
40000
these three forms of monetization:
 App market revenues (app 30000
purchases): $7.1 bln in 2011 to $37 21900
20000
bln in 2015 [Canalys 2011]
11570
 In-app purchases: $0.97 bln in 10000
2011 to $5.6 bln in 2015 [IHS 2012]
0
 Mobile advertising: $3.3 bln in 2011 2012 2015
2011 to $20 bln in 2015 [Gartner paid app purchases [M$]
2011] in-app purchases [M$]
mobile advertisement [M$]

4. Food apps acount for $207 million of
revenues in 2012
Top-Down : How much of the total app market share is taken by food apps?
 Of all the downloads, 3.1% are in 700
the "healthcare & fitness" 597
600
category, 6% in the "lifestyle"
category [Chomp 2012] 500
 Food apps fall in either of these 400
categories. eMealy explores
both. 300
207
 We sampled AppAnnie.com to 200
estimate the percentage of food 100
110
apps in each of the categories.
0
 Based on the aforementioned 2011 2012 2015
facts we estimate the food apps paid app purchases [M$]
market size from the total market in-app purchases [M$]
size mobile advertisement [M$]

5. The market value of advertisement in
the lifestyle category is 10M
Bottom-up : What’s the value of ads in the lifestyle category?
 In 2012, it’s expected about of 600+ M active Smartphones, from which 60% will be active
users of apps
 The share of lifestyle category is 6% of the total number of apps downloads
 The number of views depends on retention rate. We estimate it to be above 470 B
 Assuming an average mobile CPM of $25, total revenue from ads in the lifestyle market is
valued at about 10 M

6. The market for food apps is
young and relatively small
Alternative revenue streams must be found
 With conventional web app monetization we
are playing in a market valued at $207
million. We expect to attain revenues of at
most $10 million through advertisement
 This market is growing fast but is still small
 We need to explore alternative revenue
streams and use the app to capture users
 Conventional monetization can be used to
bootstrap the development