App downloads expected to explode thanks to tablets

Gartner says downloads will reach 185 billion by end of 2014

Apple last Friday passed the 10 billion App Store download mark and Gartner forecast today that app downloads will explode in coming years, reaching 185 billion from all app markets by the end of 2014.

One big reason for the expected growth? Tablets.

Gartner sees tablets such as Apple's iPad and dozens of rival devices that run Android or other OSes -- combined with smartphone downloads -- as a big reason for the expected jump. "Tablets will boost app downloads," said Gartner analyst Stephanie Baghdassarian in an interview. "Many are wondering if the app frenzy...is just a fashion. We don't think so."

According to Gartner, about 90% of app downloads in 2010 came from Apple's App Store, which has been open since July 2008. It will likely remain the single best-selling app store through 2014, Baghdassarian said, though its lead may shrink as other stores gain momentum. The App Store's main competitors are Android Market, Nokia's Ovi Store, Research in Motion's App World, Microsoft Marketplace and Samsung Apps, Gartner said.

"As of today, Apple is well ahead of the game," Baghdassarian said. She would not reveal how much market share the App Store is estimated to lose in the next few years, but said the same thing would happen to any first-to-market vendor facing stiff competition.

App Store apps have a reputation for quality, meaning they are generally without bugs, because they have been reviewed by Apple engineers, Baghdassarian said. But quality is not the main factor in how many apps a customer downloads, simply because buyers get the apps from a market associated with the smartphone or tablet they buy.

Android has an open philosophy in the apps that appear in Android Market, meaning that they "don't get vetted," she noted. "That's the risk Android runs with its open approach." Another factor researchers have noticed is that Android Market apps might work well on one Android phone and not so well on another, a problem Apple avoids.

Gartner doesn't have data on exactly many apps are used by smartphone and tablet owners, but estimates that for the iPhone , on average, a customer downloads four apps a month. That estimate is based on taking a number released by Apple last year for how many apps are downloaded each second and expanding that number to a monthly amount and then dividing that result by the number of iPhones on the market.

Another Gartner analyst, Carolina Milanesi, said in a statement that the average number of downloads per smartphone will remain stable as the market grows, but added that tablets "will drive more downloads from consumers, boosting the overall average downloads per device."

Gartner has been tabulating app downloads since the App Store launched; According to Baghdassarian, there were 500 million downloads by the end of the store's first year.

The cumulative total number of apps downloaded from all app stores -- not just Apple's -- were: 2.5 billion downloads by end of 2009; 11.2 billion by the end of 2010; and a projected 28.9 billion by the end of this year. Gartner skipped to the end of 2014 when it said the total will hit 185 billion app downloads.

App store revenues will pass $15.1 billion in 2011, up 190% from 2010 revenue of $5.2 billion. Jumping ahead to 2014, Gartner said revenues will grow 1,000% over 2010, reaching $58 billion. That revenue counts both end users buying apps and apps themselves generating advertising revenue for developers.

Application store revenues are split between store owners such as Apple and developers, usually with 30% going to the store and the rest to the developer. Advertising generated about 16% of app store revenues in 2010, a number that will grow to 33% by the end of 2014, Gartner said.

At the start of Apple's App Store, nearly all apps downloaded were free, although that percentage has dropped and should reach 81% of all mobile app downloads in 2011, Gartner said. The percentage of free downloads will continue to drop through 2011 and then rise between 2012 and 2014, Gartner added.

Read more about mobile apps and services in Computerworld's Mobile Apps and Services Topic Center.

This story, "App downloads expected to explode thanks to tablets" was originally published by Computerworld.

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