Consumers to spend USD 6.2 bn on mobile app stores in 2010

A Gartner study says that consumers will spend $6.2 bn in 2010 in mobile application stores while advertising revenue is expected to generate $0.6 bn worldwide.

The firm has forecast worldwide downloads in mobile application stores to surpass 21.6 bn by 2013. It has also estimated that free downloads will account for 82 per cent of all downloads in 2010, and will account for 87 per cent of downloads in 2013.

Revenue for downloads from mobile application stores was more than $4.3 bn last year and is expected to grown to $29.5 bn by the end of 2013. It includes paid-for applications as well as advertising on free applications, which is expected to generate about 25% of application stores' revenue by 2013.

The market specialist also says that games will remain the most popular downloaded application product, with mobile shopping, social networking, utilities and productivity tools growing and attracting greater spending.

Smartphones are playing a pivotal role in shaping the mobile applications market. Gartner research director Stephanie Baghdassarian said, "As smart phones grow in popularity and application stores become the focus in the value chain, more consumers will experiment with downloads." There is a flip side also to the growth in the smart phones as when they come down in price to have a mass market appeal and these users will be more reluctant to pay for applications.

Carolina Milanesi, research director at Gartner says, “Application stores will be a core focus throughout 2010 for the mobile industry and applications themselves will help determine the winner among mobile devices platforms”.

She also adds that consumers will have a wide choice of stores and will seek the ones that make it easy for them to discover applications they are interested in and make it easy to pay for them when they have to.

There would be a plethora of applications that will be available to the consumers. Of the 4.5 billion mobile application downloads forecast for 2010, the research firm said 8 out of 10 would be free applications.

An application could be free because the developer is offering it at no cost to the consumer while charging for other things within the application. There are also applications that are free to use but that charge for physical goods that you can have delivered through the application. There are many applications that are free to users and derive their revenue from advertising. This can be done with banners as well as full page advertising between game levels for instance.

Another recent report released by Gartner also puts Apple as the market leader with it having a greater than 99% share of the mobile applications market. Apple takes a 30% cut of the revenue generated from mobile applications sold via iTunes.

It is yet to be seen that in the burgeoning market of mobile applications whether Apple will be able to retain its leadership or not. Post 3G scene in India also expects a major growth in the applications market.

archanasi@cybermedia.co.in