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Mobile App Installs And Revenue To Continue To Grow

Mobile device users installed nearly 156 billion mobile applications worldwide last year, according to the International Data Corporation (IDC), generating US$34.2 billion in direct (non-advertising) revenue.

The IDC has forecast that this will grow to more than 210 billion installs and nearly US$57 billion in direct revenue in 2020, with the market experiencing slower growth in both application install volumes and direct revenue over time.

Largely driven by market maturation, this trend will see annual install growth fall into the single digits over the second half of the forecast.

The IDC has forecast that mobile application install volume will see a five-year compound annual growth rate of 6.3 per cent, while direct revenue from mobile applications, which will also experience slower growth by the end of the forecast period, will see a compound annual growth rate of 10.6 per cent.

The Apple App Store ecosystem captured nearly 58 per cent of global direct app revenue last year, up 36 per cent year-on-year, the IDC found.

Despite this, Apple’s share of global app install volume stood at only 15 per cent, down nearly 8 per cent year-on-year, with the sheer volume of Android-based devices in use ensuring a greater overall number of installs through Google Play, which captured about 60 per cent of install volume and nearly 36 per cent of direct revenue in 2015.

Google Play saw solid year-on-year growth in both downloads and direct revenues, however gains were somewhat lower than in previous years, the IDC stated, with Apple expected to continue outperforming Google Play in terms of revenue generation.

The IDC notes that “both ecosystems are more than sufficiently established to sustainably attract developers”.

“While they provide a convenient measure of the mobile app economy and its beneficiaries, we caution that preoccupation with download/install volumes and associated direct revenue may miss the thrust of changes in the mobile marketplace,” John Jackson, IDC research vice president, mobile and connected platforms, commented.

“Facebook and Google continue to dominate mobile ad spending thanks to the scale and sophistication of their network effects, with Facebook’s moves to incorporate news and other interests into its experience will likely pull traffic and install volumes away from discreet apps.

“Similarly, the emergence of ‘bots’, which seek to automate interactions in a contextually infused way, are another in a series of examples of value being created above the OS layer and even above the app.”

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