Annual mobile app sales to top $99B by 2019, says report

Apple CEO Tim Cook And App Store Success

mobile appsIn January, Apple revealed that iOS developers had earned $10 billion in revenue for 2014. Now a new report suggests that mobile app development will continue to be a lucrative endeavor. Annual revenue from mobile apps is set to reach $99 billion by 2019, says research firm Juniper Research.

The report, titled Apps & App Stores: Market Trends & Forecasts 2015-2019, found that mobile games will account for the biggest portion of app revenues for the next five years. The biggest growth sector for mobile app revenue, however, will come from lifestyle applications, such as dating and navigation apps and eBooks.

The research found that online dating activity has shown a notable transition to mobile devices, with dating apps, Zoosk, Tinder and Plenty of Fish accounting for four of the top 20 grossing U.K. iOS apps for early 2015. While online dating has become prevalent, the report indicates that the sector will expand predominantly through smartphone usage.

As the Web continues to become more commoditized, app developers have gravitated toward a freemium or in-app purchase model to monetize their efforts. One sector that continues to buck this trend, said the report, is navigation apps, preferring to use a Pay Per Download model. Many navigation apps charge once-off fees in excess of $50. However, it contended that even here the model was expected to evolve to a subscription-based model, with features such as live traffic updates providing ongoing revenue streams.

While a few still maintain app storefronts, network operators continue to struggle to make money off mobile apps. App downloads via network operator-owned storefronts now account for less than two percent of app downloads globally.

“Operators have finally recognized that they cannot compete with Apple and Google from a content distribution basis. If they are to monetize content, that revenue has to come from bundling content into subscriptions or through leveraging the billing relationship,” said Dr. Windsor Holden, the author of the report.

Baidu is now the second-largest storefront behind Google. The report forecasts that more than 235 billion mobile apps will be downloaded in 2015 and that less than one percent of apps are now paid at the point of download.

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