Current Trends And Future Prospects Of The Mobile App Market
Current Trends And Future Prospects Of The Mobile App
Market
The mobile app market
is growing faster than a beanstalk. The industry is huge and growing daily, and
there is no end in sight. Expectedly, the mobile developer population has boomed, and the number of
mobile apps in the market has hit new heights. The revenue generated by the
global mobile app industry has skyrocketed.
Hybrid monetization
models, such as in-app ads and in-app purchases, are quickly gaining popularity
in the business world. Most studies show that in-app advertising is set to be a
key driver of mobile growth over the coming years
The Mobile App Market Still Has A
Lot Of Room To Grow
App Annie reports that in 2015, the mobile app industry
generated a whopping $41.1 billion in gross annual revenue and that this figure
will rise to $50.9 billion. Gross annual revenue is projected to exceed $189
billion by 2020, according to Statista. Though the figures
differ somewhat between researchers, the overall picture is that the market is
far from saturated. App Annie’s predictions corroborate reports from Forrester that only 46% of
the world’s population will own smartphones by the end of 2016. This goes to
show that the much-discussed mobile revolution is just starting.
According to another Forrester statistic, there is a huge
gap between leading companies that regard mobile devices as a catalyst to
transforming their business and companies that consider mobile devices to be
just another development channel. As of early 2016, only 18% of companies
surveyed were in the first category. This number is expected to pass 25% by
next year. https://www.facebook.com/starisale/
Consumers
are evolving more rapidly than businesses. Today, the mobile Internet has
clearly become a necessity for many users.
As for app popularity, aggregator apps are likely to move to the
forefront. These are tools that pull content from multiple online sources and
compile it into one easy-to-follow interface. The content could range from
breaking news to niche subjects of interest. Aggregators are meant for those
who don’t have the time or desire to visit numerous websites or install
numerous apps. Some popular aggregator apps are Flipboard, News360, Feedly and
IFTTT.
Aggregator
apps tend to become user favorites when they are convenient or enhance the
shopping experience. For instance, Facebook has done this with its Messenger app, which lets users read
their feeds and order Uber rides.
Rich And Poor Platforms
Two
mobile app giants, Android and iOS, dominate the global smartphone market by Q3
of 2016, 87.8% of smartphones sold worldwide were Android. This figure is 3.1%
higher than a year ago. iOS’ market share is 11.5% — 2.5% less than in 2015.
Though this figure is negligible for its already huge market share, this growth
greatly decreased the positions of other market players. Windows, which
accounted for 0.4% of all smartphones sold, came third in the mobile platform
race, with its share decreasing 2.5% over the year.
Apple and Google have the largest and most
popular app stores. For now, it seems as if no other competitor could dream of
catching up to their variety of applications and number of developers.
InMobi estimates that 55% of app
developers make less than $1,000. Moreover, a third of app developers worldwide
haven’t managed to reach 10,000 total downloads of their products. Income
stratification is more pronounced among Android developers, whereas income
distribution is more balanced among iOS developers.
Two
mobile app giants, Android and iOS, dominate the global smartphone market.
Since 2016, over 25% of iOS
developers have generated over $5,000 in monthly revenue. Only
16% of Android developers have achieved a similar feat.
There are interesting statistics on the
average monthly revenue earned by the mobile operating systems. Forbes estimates that iOS earned an average of $4,000 per
month, pushing Android to second place with its $1,125. An outlier, Windows
Phone came third with just $625.
However, this situation changed dramatically
in 2016. According to Statista, a Windows Phone app fetches $11,400 on
average per month, whereas iOS app generates $8,100. Android makes $4,900 in
average monthly revenue. However, about 75% of developers are most favorable to Android. They
plan to boost their revenues by making Android-based products.
The Mobile App Spectrum
High-performance mobile
CPUs, featuring powerful graphics, quality displays and fast Internet
connection, have turned smartphones into gaming devices. According to reports by App Annie, mobile games, which
accounted for less than 50% of total mobile app revenue in 2011, generated 85%
of mobile app market revenue in 2015. This figure represents a total of $34.8
billion worldwide.
There has been a sharp
increase in the time spent by users in different app categories. Non-gaming
apps have overtaken games in the rapid rise of app usage. By late 2015, the mobile
app market, according to Flurry Analytics Blog, recorded
the following new heights in app usage:
·
Customization apps, such as launchers, icons,
wallpapers, and lock-screen and other device-customization apps, topped the
list, with a staggering 332% rise in session usage.
·
Mobile versions of newspapers and magazines came in second, with
a huge growth of 135%.
·
Productivity tools and apps came in third in the usage list, with
a 125% rise.
·
Lifestyle and shopping solutions recorded an 81% growth and were
ranked fourth.
·
Travel, sport, health and fitness utilities, along with
messengers and social apps, gained from 53 to 54%.
·
Games turned out to be the only outlier, with a 1% decline in
users’ time. http://starisales.com/Account
Monetization Models
Currently, there are six popular app monetization models.
DIRECT SALES
FREEMIUM
SUBSCRIPTION
IN-APP
PURCHASES
CROWDFUNDING
SPONSORSHIP
Monetization Through
Advertising
This is the most
popular monetization model and needs to be examined more closely. The reason
behind its popularity is obvious: Users like to download free apps, and the
higher the number of downloads, the greater the developer’s revenue. A report
released by
IHS Markit shows that, by 2020,
in-app advertising will attract $53.4 billion in total revenue per year. That
translates to almost 63% of mobile display advertising revenue.
As in other sectors, a few major developers of advertising-based
apps are generating the bulk of the revenue. All other developers are forced to
settle for leftovers. Klick
Health reports that the
indisputable leader is Facebook, with 44.3% of all mobile ads shown being in
Facebook apps. Others in the ranking are, in order, Alibaba, Google, Tencent,
Twitter, Pandora and Yahoo.
Companies that generate the highest advertising revenue often
end up becoming major advertising sponsors. This trend is especially prominent
in mobile games. The largest vendors, such as Rovio, Gameloft and Disney,
employ hundreds of small indie studios, which advertise their own game products
in less popular games.
The Bottom Line
As you can see, the
explosive growth in the mobile app market isn’t stopping anytime soon. Despite
increasingly strong competition in the industry, developers are applying new
monetization methods and creating more interesting and useful solutions for
users. At least two new monetization models have been shown to be very
effective, gaining popularity in the last couple of years.
None of the models covered above could be described as
inefficient. Rather, developers and publishers have gained skill in deploying
these models in particular cases. For instance, the subscription model works
only for certain niches but is the most profitable of all. At the same time,
the freemium model, much criticized for being potentially unscrupulous, shows
remarkable results when used thoughtfully, Clash of Clans being a a perfect example.
Paid apps are the only ones rapidly falling out of favor, although they are
still proving their worth in some cases.
Hybrid monetization models, such as in-app ads and in-app
purchases, are clearly gaining popularity in the business world. Most studies
show that in-app advertising is set to be a key driver of mobile growth over
the coming years.
Today, iOS and Android are the leading mobile operating systems,
and tech giants Apple and Google own the biggest mobile app stores. http://starisales.com/Account
Time will tell how the mobile app market will develop. Market trends show that the market
will continue to generate higher and higher revenue in the foreseeable future.
So, it is quite clear that the much-discussed mobile app revolution is just
beginning.
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