According to a recent report by Gartner, annual downloads from mobile app stores will reach 102 billion in 2013, up from 64 billion in 2012. Total revenue in 2013 will reach $26 billion, up from $18 billion in 2012. Free apps will account for 91 percent of total downloads in 2013. Gartner said that in-app purchases (IAPs) will account for 48 percent of app store revenue by 2017, up from 11 percent in 2012.
Commenting on the insights, Brian Blau, research director at Gartner said,”Free apps currently account for about 60 percent and 80 percent of the total available apps in Apple’s App Store and Google Play, respectively.iOS and Android app stores combined are forecast to account for 90 percent of global downloads in 2017. These app stores are still increasingly active due to richer ecosystems and large and very active developer communities. However, we expect average monthly downloads per iOS device to decline from 4.9 in 2013 to 3.9 in 2017, while average monthly downloads per Android device will decline from 6.2 in 2013 to 5.8 in 2017. This relates back to the overall trend of users using the same apps more often rather than downloading new ones.”
According to the report, IAP purchases will drive 17 percent of the store revenue in 2013 and increase to 48 percent in 2017. However, as with downloads, IAP is expected to have strong growth in 2013 and 2014 and slow in later years. This is due to smart devices reaching more mass-market consumers whose willingness and/or affordability to spend on IAPs is lower than early adopters. Nevertheless, IAP will become a major monetization method for apps stores and developers.
Research shows that IAP contributes to a significant amount of Apple’s App Store revenue from iPhones worldwide. Other platforms have not reached such high levels as the iPhone, but analysts expect they will also see IAP contributions increase in the future.