The app market will generate more than $35bn (£22bn) by 2017 predicts Strategy Analytics' Mobile Apps Revenue Forecast. This is huge growth from the $1bn seen in 2009.
It will be driven by improvements in advertising, with virtual goods like apps becoming more attractive to consumers and the industry developing improved methods of monetisation.
Although paid downloads accounted for nearly 70 per cent of revenue in 2009, they will account for less than 36 per cent in 2017. And this seachange isn't so far away – in-app ads will account for the most revenue beginning in 2013. Improvements in audience targeting will offer better CPMs.
“The battle for developers is on and supporting recurring revenue streams is essential to gaining developer support," said Josh Martin, director of apps research. "It is for this reason that Microsoft and RIM are ensuring their new platforms support in-app purchase and subscription in addition to paid downloads and advertising at launch. They continue to battle for third place as the forecast shows Apple’s and Google’s app stores dominating revenue generation for developers throughout the forecast period."