App Market to grow to $77 Billion industry by 2017

The market for mobile application has already grown to many folds since the start, it has become huge — and it’s just going to keep getting bigger. Businesses are going mobile, if your business doesn’t already have a mobile application, it might be time to think about getting developed one.

More than 1 Billion smartphones were sold in year 2015. This number is twice as many as the number of personal computers according to infographic generated by the University at Birmingham’s Online Masters in Management Information Systems.

Currently, the average mobile app user spend more than 15 hours a month on more than one dozen apps. Wondering that’s a lot of people spending a lot of time with their noses stuck in apps, do you?

 

Given that 46% of App users report having paid for their apps, that’s big money, too. By 2017, its expected that over 268 billion download will generate $77 billion worth of revenue.

Some mobile apps with highest reported revenue are Clash of Clan.

At the end of year 2012 Clash of Clans had banked a total of $101 million in revenue as per their reported annual earnings. The following year in 2013, that number sky rocketed and jumped up to a reported yearly revenue of $892 million, a whopping $791 million increase.

For instance, reports say Pokemon GO makes around $2 Million a day from in app purchases, while reports say Mobile Strike makes $1.5 million while all time favourite candy crush soda saga makes around half a million a day, this market is expected to grow by millions with new apps being submitted to stores every day.

Let’s look at the  numbers for how much revenue was generated by the app economy since 2011 and the forecast for the next two years.

App Revenue Statistics for Apple App Store:

 • Total app revenues are projected to grow from $45.37 Billion which was in 2015 to $77 Billion in 2017

 • In-app purchase revenues will reach around $29 billion by 2017

 • The in-app purchase share of the total app revenue is projected to hit a growth of – 48.2% in 2017

 • Apps contribution projection to overall iTunes revenue will hit 20% by the year 2020

Going back in time the biggest increase was in 2012, when the annual revenue jumped from $8.4 Billion to $18.7 Billion. For the iOS platform this jump can be explained by Apple introducing iPhone 5, the first model with a bigger 4 inch screen. It was the first screen size increase since the original iPhone that debuted in 2007 with 3.5 inch screen. Bigger screen meant an opportunity to introduce new kind of apps and as a consequence it facilitated app revenues fast growth. Where as for Android it was the year of growth as well, in Quarter of 2012 Android got 75% of the international smartphone market. The growth was led by more and more smartphone manufacturers adopting Android to run their mobile devices with.

Mobile app business is mainly powered by three models – paid apps , in-app purchase and advertising. Originally the app ecosystem debuted with the paid model only and, as we see during 2011-2012, the total revenue was doubled, from $7.1 billion in 2011 to $15.4 billion in 2012 but since the following year and on we see a rapid decline, the revenue leveled on $3.9 billion a year on average. The reason for revenue, driven by paid model, to decline was in-app purchase model introduction in mobile apps. With in-app purchase mobile app users could install an app for free and try it to see if it’s something they really need or want and later pay for additional functionality or to remove ads inside an app that was a clever approach. Over the years this in-app purchase model allowed this model to outgrow the paid model. The forecast predicts even steep decline for the next two years. The app revenue growth estimation for 2016 and 2017 is $1 Billion on average.

This is the best time to get mobile apps developed for your business if you don’t have one or if you have a million dollar app idea don’t wait for it just go for it before anyone else steals the show.