Mobile application downloads expected to experience huge boom through 2013

Mobile app download explosion begins in 2010 and should continue through 2013...but there is a downturn ahead. Mobile advertising revenue looks to increase. SNEWS has details.
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ABI Research is reporting that 2010 will be a big year for mobile application downloads, with almost 6 billion mobile applications forecast to be downloaded, up from an estimated 2.4 billion in 2009. Looking ahead the next several years, ABI predicts that mobile application downloads will grow to about 6.5 billion in 2011, with further growth to slightly less than 7 billion in 2012 and almost 7 billion in 2013. The rapid adoption of Smart Phones -- which had a recorded sales growth of 20 percent in 2009 -- and the explosion of app stores are fueling the app download frenzy.

According to ABI Research's latest report, “Mobile Application Storefronts,” North America will become the No. 1 region globally for downloads of mobile applications in 2011. While Europe currently leads in numbers of mobile app downloads, accelerated growth expected in North America should vault the region ahead in short order.

Annual global downloads of mobile apps, though, are expected to begin a slow decline starting in 2013. While North America will retain its leadership at least through 2015, its growth curve will begin turning negative after 2013, as will Latin America's. Europe, Asia-Pacific, the Middle East and Africa will all maintain fairly flat growth curves as overall downloads of mobile apps begin declining.

One of the reasons downloads will decline, according to ABI, is that the increasing functionality of mobile websites lessens the need for apps and that, in turn, will become a major driver in expected future declines of app download rates.

ABI cites several other trends as leading to the eventual decline of mobile app downloads. 

1. Increasingly applications are being built to web standards and will migrate from app stores to regular websites. As a result, some sites’ mobile users won't need an app at all.

2. Also, it is expected that more popular applications will be preloaded on mobile devices with social networking apps in particular finding their way as a pre-loaded app on new Smart Phone products.

ABI also forecasts that revenues from mobile app downloads will peak in 2012 and then start declining in 2013. The research firm points to anticipated downward pressure on application prices, the proliferation of free and advertising-supported applications, and bundled applications from major handset providers as the underlying causes for this expected revenue decline.

Despite increased competition, iPhone still rules and ABI sees no change in that position. The iPhone platform, which represented about 70 percent of all mobile application downloads in 2009 and close to 50 percent in 2010, is expected to remain the leading mobile application platform through 2015. iPhone applications will continue to represent roughly 50 percent of all mobile app downloads, with the Android platform showing the most growth of competing platforms with 800 million Android apps predicted to be downloaded in 2010.

In related news, a recent report from JiWire (www.jiwire.com) indicated that the use of mobile devices at public Wi-Fi hotspots in North America grew by 79 percent in the first half of 2009, while other research from MRI (www.gfkmri.com) indicated that even though the majority of consumers currently find mobile ads bothersome, 20 percent would like to view live TV on their Smart Phones. Both of these developments could bode well for the mobile advertising market. 

Which is good news since global spending on mobile advertising will increase 74 percent this year, to $913.5 million, and mobile ad spending is expected to surpass $13 billion by 2013, according to a new report from Gartner (www.gartner.com/technology/home.jsp). Gartner also reported that Smart Phone adoption will help speed mobile advertising growth. Smart Phones will account for 45.5 percent of all mobile phone sales in 2013. 

Location-based advertising, becoming more effective as GPS technology gains wider availability, will appeal to young mobile users who are increasingly using mobile to navigate. But in order to fully take advantage of location-based advertising, media companies will have to develop local directory services like Yelp and Citysearch, Gartner reported. 

To read the ABI Research “Mobile Application Storefronts,” click here.

--Michael Hodgson

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