The exploded adoption of Smartphone is helping global mobile apps ecosystem to register a phenomenal growth year over year. Consequently, the global mobile app revenue is estimated to grow up by 2.2x over the period of next five years, from US$36 billion in 2015 to US$79 billion in 2020, according to the latest report from a leading analyst firm Ovum.
The revenue growth would largely be driven by the increased number of app downloads in the next five years. The number of total app downloads in 2015 clocked 211 billion and Ovum estimates that the figure will go up to 378 billion by 2020.
The record growth in both, the number of mobile app downloads and mobile app revenue, is the result of maturing smartphone markets, especially China and India where app adoption is all time high.
The mobile app market incepted in 2008 will record a phenomenal growth between 2016 and 2020, according to Ovum. While the growth in mobile app revenue will be more than three times than that was recorded between 2008 and 2015, the number of app downloads will increase by 2.5 times during the same period.
Mobile App Downloads and Revenue Growth: The Drivers
The Ovum also highlights the fact that the growth of mobile app downloads would become slow post 2017-2018 and it would be app quality and usage that would be playing the key role in the success of any apps.
The smartphone market in the US is already saturated and the emerging markets, such as China and India, would be heading towards saturation post-2018, the growth in the number of app downloads will slow down. However, as the average time spent on apps by a user is increasing, app developers can see an increase in app revenue that can be squeezed from them.
Besides, the extension of mobile operating systems to other connected devices will also play instrumental in the growth of both app downloads and app revenue. The adoption of connected devices, such as wearable, TV and IoT, will help mobile app developers and startups to garner more revenue from their apps.
All said and done, the key to success for any app lies in monetization methods. While most of the app developers are becoming savvier about how to monetize their freemium apps, and subscription-based music and video apps, have started gaining transaction in the market. All such development has started making a significant contribution to global app revenue market.
Mobile App Ecosystem: Developed vs Emerging Market
The global mobile app downloads and app revenue market will be flourishing like never before in the next five years, the contribution of developed and emerging markets to this growth is really interesting.
Emerging markets have controlled the lion’s share of the total number of app downloads in 2013 and the scenario will not be changing much according to Ovum. In 2020, nearly 3 out of every four mobile app downloads will take place in emerging markets. China, which has been the driving force behind the growth of app downloads in emerging markets, will continue to take the largest chunk of downloads over the forecast period.
Interestingly, the trend is absolutely opposite when it comes to app revenue. Despite the fact that emerging markets will record the 78% of total app downloads in 2020, 61% of app revenue would be generated by developed markets with mere 22% app downloads.
- Free apps are more popular in emerging markets. Freemium and in-app advertising apps are gaining better response in emerging markets. In contrast, paid, in-app purchase and subscription-based apps have a better market proposition in developed markets likes of US.
- App developers need to stay focus on connected devices ecosystem to maximize their app revenue.
- The success of any mobile app largely depends on the time spent on apps by a user. More the apps are able to engage users, more revenue would be garnered by app developers.