GetJar Predicts Fourfold Increase in Apps Revenues by 2012

Independent app store GetJar has released a report that predict that the global mobile applications market will be worth $17.5 billion (11.5 billion) by 2012, a fourfold increase from its value of $4.1 billion in 2009. The report, commissioned by GetJar, was prepared by Chetan Sharma Consulting, and also predicts the total number of mobile app downloads to increase from over 7 billion in 2009 to almost 50 billion in 2012 a year-on-year growth rate of 92%. GetJar notes that according to figures from the world music trade body, the IFPI, this would mean that the value of apps sold would be greater than the value of CDs sold in 2012. Given that most people under the age of about 30 barely know what a CD is, however, thats a statistic that my not surprise many.
The report says that by 2012, off-deck paid-for apps will be the biggest revenue generator, accounting for almost 50% of all apps revenue. According to the report, in 2009, on-deck apps available from mobile operators accounted for over 60% of all apps revenue, but this will fall significantly to just under 23% by 2012. Dspite Apples dominance the firm accounted for 45% of all app downloads by volume in 2009, GetJar points out that operators tend to offer must more paid app content, hence their strong showing in revenue terms.
The study outlines opportunities for both high end smart phones (such as BlackBerry and Android powered handsets) and feature phones  (such as the Samsung Instinct/Jet and Nokia X6). In 2009, 90% of handsets in use worldwide were so-called feature phones, while smart phones and data cards
The report notes that apps economies are evolving differently worldwide, suggesting a need for greater focus on developing different apps business models as opposed to a one size fits all approach. For instance, the average selling price (ASP) for an app in N. America was $1.09, significantly higher than ASPs in developing markets such as S. America ($0.20) and Asia ($0.10). At the same time, post-2012, app downloads in developing regions such as Asia may eventually exceed those in Western regions, although monetisation of these downloads will require different business models, such as advertising and virtual currency, than those seen in developed markets.
The report says that revenue opportunities in Europe are set to soar from $1.5 billion in 2009 to $8.5 billion in 2012, while in N. America, the figure will rise from around $2.1 billion to around $6.7 billion in 2012. Currently, apps are most popular in Asia, with the region accounting for 37% of global downloads in 2009. However, while Asia had the highest number of downloads, users in North America spent the most money on apps, accounting for over 50% of revenue.
Other findings from the research include:
Advertising-based revenue models have become increasingly popular. In 2009, advertising contributed almost 12% of the overall apps revenue. However, this share is expected to more than double to over 28% by 2012 given the high proportion of prepay users in developing markets.
The battle of the app stores is well underway – in 2009 the number of app stores leapt from eight to 38. The number of app stores is expected to further increase during 2010.
The price of mobile applications can vary from $0.99 to $999, however the average selling price in 2009 was approximately $1.90. This is predicted to decrease by 29% over the next three years, although advertising revenue derived from apps is likely to stay relatively flat.
With the consumer appetite for mobile apps rocketing, the opportunities for developers are huge, says GetJar CEO and Founder, Ilja Laurs. This report signifies a battle for survival of the fittest among app stores worldwide, with app revenue and growth opportunities growing significantly. There is no way that this many app stores will survive in the long term, and while the value of the global app economy is set to be astoundingly high by 2012, we think only a few app stores will share this revenue.

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