Recent findings from technology market intelligence firm ABI Research suggest the global app economy will reach $25 billion in 2013. Of that, $16.25 billion, or a commanding 65 percent, will belong to Apple (NASDAQ:AAPL). By 2018, the combined app revenue from tablets and smartphones is projected to reach $92 billion, a 268 percent increase.
There are a few obvious implications about this forecast. The first is that Apple continues to dominate Android in terms on monetization. By ABI’s own predictions, 800 million devices will run Android by the end of 2013, compared to million for Apple. Despite this tremendous lead, Google’s (NASDAQ:GOOG) Android platform will claim just 27 percent of the dollars.
The second is that the app economy will grow at a faster rate than most other major markets, at an average annual rate of 44.6 percent. In January, Apple announced that customers had downloaded over 40 billion apps. Nearly half of those were in 2012 alone, yielding the obvious conclusion that the rate of download was increasing by orders of magnitude. There were over 2 billion in December of 2012 alone, fueled by the over 500 million active accounts registered to the App Store. These numbers can only be expected to balloon.
Apple also revealed in January that it paid out over $7 billion to developers in 2012. Like the rate of downloads, payments to developers are growing incredibly quickly, up from just $2.5 billion in July of 2011. This massive fire hose of dollars moving out of Apple and into the hands of developers has created a well-known industry all its own. If the ABI report holds true, then this industry promises to demonstrate tremendous growth over the next few years.
What’s more, the report explores the increasingly important role of tablets in the app mix. Senior ABI analyst Aapo Markkanen comments: “The larger screen makes apps and content look and feel better, so there are more lucrative opportunities. One might think that the bigger installed base of smartphones would compensate for the disparity, but that notion fails to take into account the arrival of low-cost tablets, which hasn’t even started yet at its earnest. The smartphones paved the way for them, but in the end we believe that it’s the tablets that will prove the more transformative device segment of the two.”
He continues: “The really big deal about tablets is how they will help to finally bring the age to, for instance, children and the elderly. The business opportunity associated with them is undeniable, but at the same they can also bring about very significant social benefits.”
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