The global mobile industry is witnessing explosive growth for last couple of years. Advancement of mobile technology, improved infrastructure and Smartphone revolution have allowed people to perform much more with their mobile phones than ever before. This has resulted in an exponential demand and growth of mobile applications that has made the development service market twice as big as app download market.
According to research2guidance, a Berlin-based market research company specializing in the mobile industry, worldwide mobile application development market is expected to reach $100 billion in revenue by 2015. The market for app development services includes application creation, management and distribution and extension services.
The current app development market which stood $10.2 billion in 2010, is forecast to grow with 158% CAGR. Around 66% of applications development is being done by third-party developers and that is expected to grow with more and more companies joining the mobile business bandwagon.
One another major factor behind the increased demand in app development is appreciated demand of Tablet devices. As per another report, Apple is expected to ship around 85 million of Tablets alone in 2011. As more businesses will engage Tablets, diversified demand of business specific applications is bound to grow.
Another report clearly point outs how Smartphone users are becoming more application dependant than ever before which is resulting in more data usage every quarter. Interestingly, Smartphone users are slowly becoming more fascinated towards apps than traditional use of mobile phone like making calls and messaging.
The official press release from research2guidance over app development market is below:
The development service market today is already twice as big as the app download market.
The market for app development services, including application creation, management, distribution and extension services, will grow in value to US$100 billion in 2015. In only a year and a half after the launch of the Apple App Store the application developer market overtook the app download market in revenue size.
“With increasing Smartphone and application penetration, companies have a vital need to be in this market and fuel the demand for app development services” states Egle Mikalajunaite, Senior Research Analyst at research2guidance.
The number of applications developed by third party application developers represents 66% of all applications. This share will increase over the next years, as more and more companies want to publish applications but don’t have the resources in-house.
Most developers started out as publishers, but the increased level of competition in the main app stores, along with high failure rates, made more and more application developers alter their business model. Concentrating on developing applications for third parties, as opposed to creating their own applications, was seen as a more profitable business alternative. “Selling the spades became a much more reliable and bigger business than digging for the gold” describes Ralf-Gordon Jahns, Research Director at research2guidance.
Today most app project revenue is generated from app creation services (concept creation, design and coding). In 2010, app maintenance, analytics, distribution and extension services constituted merely 2% of earnings. “The need for additional services is growing and this share will grow significantly between now and 2015. However, app development will remain the core part of app project costs” explains Daniel Meehan Research Analyst.
For other insights on typical app developer companies, app project sizes, margins, alternative development solutions and more look in the new research2guidance report “The Market For Mobile Application Development Services: Selling The Spades For The App Gold Diggers”, released in July 2011.