Annual downloads from various mobile app stores in this calendar year will grow to 102 billion from 64 billion last year, according to a report by IT research and analysis firm Gartner. Correspondingly, total revenue from app downloads will grow to $26 billion this year from $18 billion in 2012. Out of the total app downloads in 2013, free apps will account for 91 percent. The report noted that by 2017, in-app purchases will account for 48 per cent of the total app store revenue, up from 11 per cent last year. This year, in-app purchases will drive 17 per cent of the app store revenue.
"We expect strong growth in downloads through 2014, but growth is forecast to slow down a bit in later years," said Sandy Shen, research director at Gartner. "The average downloads per device should be high in early years, as users get new devices and discover the apps they like. Over time, they accumulate a portfolio of apps they like and stick to. So, there will be moderate numbers of downloads in the later years."
Gartner noted that free apps currently account for about 60 per cent in Apple's App Store and 80 per cent in Google Play. Both apps stores combined, the free app downloads are forecast to account for 90 per cent of global downloads in 2017.
"However, we expect average monthly downloads per iOS device to decline from 4.9 in 2013 to 3.9 in 2017, while the same for Android will decline from 6.2 in 2013 to 5.8 in 2017. This relates back to the overall trend of users using the same apps more often rather than downloading new ones," said Brian Blau, another research director.
The research report observed in-app purchases will slow down in coming years. It is due to the fact that smart devices will reach more mass-market consumers, whose willingness and/or affordability to spend on in-app purchases is lower than early adopters. Nevertheless, in-app purchases will become a major monetisation strategy for apps stores and developers.
Predictably, in-app purchase contributes to a significant amount of Apple's App Store revenue from iPhones worldwide. Other platforms have not reached such high levels, but analysts expect it to increase in coming years.