App Store Revenue to Reach $25B in 2013

By Gary Kim March 05, 2013

The annual volume of smartphone app downloads will reach 56 billion in 2013, ABI Research predicts. Separately, Gartner estimates apps will represent $25 billion worth of revenue in 2013.  

The issue, for service providers, is whether there is much app revenue to be earned, and if so, where. Today, with revenue split between app developers and the operators of app stores (iTunes, Google Play, GetJar, Amazon App Store and others), it often appears there is little direct revenue to be made by service providers.

Up to this point, carrier app stores have not fared well, compared to app stores operated by device (iTunes) or operating system (Android) ecosystem players. A few independent operations exist, but none of the telco-sponsored initiatives have found traction.

At least so far, app stores have driven revenue for telcos only indirectly, by creating value for users of smartphones.

In 2013, for the first time, shipments of smartphones are forecast to top sales of feature phones. With shipments expected at 50.1 percent of all mobile phones shipped worldwide, smartphones are touted to ship 918.6 million units in 2013, according to the latest data from IDC.

Google’s Android will account for 58 percent of the total shipments, with Apple’s iOS representing 33 percent. Microsoft’s Windows Phone will finish 2013 with less than 4 percent, with BlackBerry garnering 3 percent.

Mobile users will download around 14 billion tablet apps during the year. In the tablet segment, 75 percent of the amount will be apps running on iOS. Android will represent an annual share of 17 percent, excluding Kindle Fire.

Amazon’s tablets will have share of 4 percent, while Windows will get around a 2-percent share.

ABI Research expects a growing number of smartphone-focused developers to adopt an Android-first strategy in 2013, given the growing share of installed base Android now represents.

Edited by Braden Becker

Contributing Editor

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