Inside The $26 Billion Mobile App Economy

Revenues from apps are projected to top $26 billion this year--that's more than Dell paid to buy itself into going private.

Everywhere you look there's someone using a mobile app for something, from the mundane to the surprising. It's an industry that's flourished at an incredible rate since the arrival of the iPhone in 2007--and now, Gartner says this year, global revenues from apps will be $26 billion, a rise of more than 44% since last year.

Gartner also says 102 billion mobile apps will be downloaded around the world during 2013, which is nearly 15 apps for every person on the planet. The download total is a 60% rise from last year's figure. What's driving the market? Free or freemium apps, with about 91% of all downloads being free. This is to be expected considering the majority of smartphones run Android, and free or ad-supported apps seem to dominate the app stores for these phones.

Gartner even suggests that by 2017, app downloads will approach 269 billion and that the proportion of free apps will rise to nearly 95%, with in-app purchases bringing in close to half of all app revenues.

The figures for this year are plausible, especially since everyone and their dog now owns a smartphone or a tablet, or both. But do you really believe that by 2017 the majority of downloaded apps will be free? That presupposes that Android will continue to go unchallenged by anyone in the mobile phone market for the next four years, and that the Android app marketplaces will remain the same. Considering the incredibly fragmented state of the Android platform and the implications this has for app quality, this might be bad news for the consumer.

[Image via Flickr user: Alison Cassidy]

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