Mobile Tech Alert!
Gartner, global technology researcher, has released a new report indicating that consumers will spend $6.2 billion on mobile applications in 2010.
Analysts expect that 4.5 billion app downloads will occur in 2010, with eighty percent of these apps being free to consumers. Mobile advertising revenue is expected to generate $0.6 billion worldwide as a result. Gartner is also expecting downloads to rise to more than 21.6B by 2013; with the percentage of free downloads increasing to 87 percent in the same time.
Mobile applications can be offered as free due to internal charges or pure advertising revenue. Some applications are free to download the program itself, but all program extensions are locked until paid for. Advertising revenue has been created through mobile apps by placing ads between game levels or on loading screens.
“As smartphones grow in popularity and application stores become the focus for several players in the value chain, more consumers will experiment with application downloads,” Gartner research director Stephanie Baghdassarian, said. “Games remain the No. 1 application, and mobile shopping, social networking, utilities and productivity tools continue to grow and attract increasing amounts of money.”
The study alludes to the future trends smart phones will be experiencing within the market. As smart phones drop in price, the average tech savvy of their users is going to also drop. As users of smart phones become less technologically inclined, they will also be more reluctant to pay for applications.
“Growth in smartphone sales will not necessarily mean that consumers will spend more money, but it will widen the addressable market for an offering that will be advertising-funded,” Baghdassarian added. “The value chain of the application stores will evolve as rules are set and broken in an attempt to find the most profitable business model for all parties involved.”
“Application stores will be a core focus throughout 2010 for the mobile industry and the applications themselves will help determine the winner among mobile device platforms,” said Gartner research director Carolina Milanesi. “Consumers will have a wide choice of stores and will seek the ones that make it easy for them to discover applications they are interested in and make it easy to pay for them when they have to. Developers will have to consider carefully not only which platform to support but also which store to promote their applications in.”
