Mobile app stores are expected to see annual downloads increase by 38 billion in 2013, with free apps accounting for 91 percent of total downloads this year, a new research report by Gartner revealed on Thursday.
According to report, annual downloads from mobile app stores will reach 102 billion in 2013, which will be up from 64 billion in 2012. In addition, the total revenue from app store purchases is expected to reach $26 billion, a 31 percent increase from $18 billion last year. And, while a majority of downloads this year will be dominated by free apps and this trend is likely to continue, Gartner said that in-app purchases, or IAPs, will account for 48 percent of app store revenues by 2017, up from 17 percent in 2013.
“We expect strong growth in downloads through 2014, but growth is forecast to slow down a bit in later years,” Sandy Shen, research director at Gartner, said in a statement. “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.”
According to Brian Blau, research director at Gartner, free apps currently account for about 60 percent and 80 percent of total available apps in Apple's (NASDAQ:AAPL) App Store and Google’s (NASDAQ:GOOG) Play Store, respectively. By 2017, iOS and Android app stores are forecast to account for 90 percent of all downloads worldwide.
“These app stores are still increasingly active due to richer ecosystems and large and very active developer communities,” Blau said in the statement. “However, we expect average monthly downloads per iOS device to decline from 4.9 in 2013 to 3.9 in 2017, while average monthly downloads per Android device will decline from 6.2 in 2013 to 5.8 in 2017.”
Gartner said that IAPs contribute to a significant amount of Apple's App Store revenue from iPhones worldwide, while other platforms have not reached such levels. However, analysts expect that other platforms will also see IAP revenue contributions increase in the future.
"We see that users are not put off by the fact that they have already paid for an app, and are willing to spend more if they are happy with the experience, Blau said. "As a result, we believe that IAP is a promising and sustainable monetization method because it encourages performance-based purchasing.”