Apps Market to Grow to $60 Billion in 2018

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Boston, MA - July 30, 2014 – The Strategy Analytics Apps Ecosystem Opportunities Report, Mobile Apps Forecast Total Market Forecast 2008-2018, predicts strong growth from $21.4 Billion in 2013. Apple's App Store and Google Play will continue to be the dominant distribution channels, but Windows Phone Store and Amazon Appstore are showing strong growth in the battle for third place.

David MacQueen, Executive Director, Apps and Media Research, said, "In terms of downloads, Google Play overtook Apple App Store in 2012, but iOS remains ahead in terms of revenue. We anticipate that Google Play will finally overtake the Apple App Store in terms of revenues in 2016. Google's ambition to drive Android, and thus Google Play, as a platform for scale across all connected devices (phones, tablets, wearables and in the car) will increase opportunities for Google Play to grow revenue and surpass Apple by 2016."

"Looking at those revenues, we are seeing in-app purchases account for the majority of spend, with paid download revenues across all app stores accounting for just over 20% of the market today, which we expect to shrink further to 16% in 2018, although there is a risk that excessive regulation may change the market outlook" he added. "However, concurrent to this, the ASP (average selling price) of paid apps has seen an increase from a low of $2.07 in 2010 to $2.69 last year. Simply put, the market is now dividing between 'freemium' and paid apps, and the $0.99 app is getting squeezed out."

Adam Thorwart, Senior Research Associate in the App Ecosystem Opportunities (AEO) research program, said, "We have also been keeping a close eye on Amazon Appstore and Windows Phone Store. We believe they are showing the strongest growth, at 733% and 371% respectively, although they continue to be eclipsed by Apple and Google. Amazon's retail experience and Windows Phone's rapidly growing installed base are the key drivers for this growth."

 

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