Study: mobile apps will outsell CDs by 2012
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Study: mobile apps will outsell CDs by 2012


The global mobile apps economy is set to be worth $17.5billion by 2012, according to an independent report commissioned by GetJar (http://www.getjar.com/), the world’s second largest app store.

Mobile app downloads across all types of handset are also expected to increase from over seven billion downloads in 2009 to almost 50 billion in 2012 -- a year-on-year growth rate of 92%.
This would mean that the value of apps sold would be greater than the value of CDs sold in 2012 ($13.83 billion).

To understand the potential of the “global mobile apps economy,” GetJar commissioned independent consulting firm Chetan Sharma Consulting to lift the lid on the rapidly expanding global apps market. The aim of the project was to analyze the potential and real value of the mobile apps market worldwide, using first hand data.

It is clear that by 2012, off-deck paid-for apps will be the biggest revenue generator, accounting for almost 50 per cent of all apps revenue. By comparison, in 2009, on-deck apps available from mobile operators accounted for over 60% of all apps revenue, but this will fall significantly to just under 23% by 2012.

The study outlines opportunities for both high end smart phones (such as the iPhone) and feature phones. In 2009, 90% of handsets in use worldwide were so-called feature phones, while smart phones and data cards accounted for the remaining 10% of the market. In some regions such as North America, uptake of smart phones was much higher (over 20%) than other regions (3% in Middle East/Africa).

Apps economies are evolving differently worldwide, suggesting a need for greater focus on developing different apps business models -- as opposed to a “one size fits all” approach. For instance, the average app selling price (ASP) in North America was $1.09, significantly higher compared to ASPs in developing markets such as South America ($0.20) and Asia ($0.10). At the same time, post 2012, app downloads in developing regions such as Asia may eventually exceed those in Western regions although monetization of these downloads will require different business models (advertising, virtual currency) than those seen in developed markets.

The revenue opportunities in Europe are set to soar from $1.5 billion in 2009 to $8.5billion in 2012, while in North America the figure will rise from around $2.1 billion to around $6.7billion in 2012. Currently apps are most popular in Asia, with the region accounting for 37% of global downloads in 2009. However, while Asia had the highest number of downloads, users in North America spent the most money on apps, accounting for over 50% of revenue.

Other findings from the research include:

° Advertising based revenue models have become increasingly popular. In 2009, advertising contributed almost 12% of the overall apps revenue. However, this share is expected to more than double to over 28% by 2012 -- given the high proportion of prepay users in developing markets.

° The battle of the app stores is well underway. In 2009 the number of app stores leapt from eight to 38, an increase of 375%. The number of app stores is expected to further increase in 2010.

° The price of mobile applications can vary from $0.99 to $999, however the average selling price in 2009 was approximately $1.9. This is predicted to decrease by 29% over the next three years, although advertising revenue derived from apps is likely to stay relatively flat.

The model focused on apps consumption by five major regions: North America, Europe, South America, Asia, and Middle East and Africa.

 
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