Good news for app entrepreneurs!
Since the inception of the iPhone and devices running on the Android operating system, the app market has grown manifold. According to a report, the combined value of paid applications, purchase of app-related services and goods and in-app advertising is expected to grow two-fold to $151 billion by 2017.
The application market, comprising of all the apps available on Google Play, Apple’s App store and Blackberry World among others made up for most of the revenue generated through mobile phone applications. On the other hand, in 2013 the revenue collected through digital downloads, paid app downloads, virtual goods, in-app advertising and sale of physical goods has reached $60 billion. As of now there appear no signs of a slowdown.
What Do The Stats Say?
This report was published by AppNation a few months ago. The survey was conducted on 2500 consumers in the United States. At the end of the survey, following points were summarized –
- Downloads account for less than $1 billion of the total app-related revenue in 2013. The revenue from application downloads is estimated to be around the $1 billion mark.
- The largest source of app-related revenue is the sale of services and physical goods which accounted for about $45 billion this year.
- Nearly 11 percent of the consumers in the United States of America own a car that supports applications.
- In the next six months, the number of people willing to buy a Smart TV will increase three times.
- A majority of mobile phone users under the age of 45 use video applications at least twice a week.
It is said that as the use of smartphones increase, the application segment will grow in leaps and bounds. Recent statistics have also revealed that the sales of smartphones have surpassed sales of feature phones in a few emerging markets. As users will spend more time on their smartphones, the need for apps will also increase compared to other media.
What Does This Mean?
A lot of discussions have been done on the application revenue model that emphasize on in-app purchase of virtual goods or advertising. While this survey suggests that all these things will make money, it very interesting that the biggest source of revenue will be the sale of physical goods in the real world.
The report also hints at a few areas that App developers should begin to concentrate on in order to have a competitive edge over others. Domains such as Smart TVs and Smart cars are relatively new and early adoption could give developers a larger piece of the revenue share. This report also confirmed that word of the mouth recommendation continues to be the number 1 tool for marketing applications.