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Gartner Says Free Apps Will Account for Nearly 90 Percent of Total Mobile App Store Downloads in 2012

Key Trends for the Mobile Industry to Be Examined at Gartner Symposium/ITxpo 2012

                  Free apps will account for 89 percent of total downloads in 2012, according to Gartner, Inc. Worldwide mobile app store downloads will surpass 45.6 billion in 2012, with free downloads accounting for 40.1 billion, and paid-for downloads totaling 5 billion (see Table 1).

"In terms of the apps that consumers are buying, 90 percent of the paid-for downloads cost less than $3 each," said Sandy Shen, research director at Gartner. "Similar to free apps, lower-priced apps will drive the majority of downloads. Apps between 99 cents and $2.99 will account for 87.5 percent of paid-for downloads in 2012, and 96 percent by 2016." 

Gartner expects Apple's App Store to have more than 21 billion downloads in 2012, which is an increase of 74 percent over 2011 and indicates continued strong demand for mobile app content. 

"Apple's market share is the largest, considering its App Store accounts for 25 percent of available apps in all stores," said Brian Blau, research director at Gartner. "The number of apps available is driven by an increasing number of stores in the market today that include platform owners, device vendors, communication service providers (CSPs) and others who want to offer core mobile app services. These stores will see their combined share of total downloads increase, but demand for apps overall will still be dominated by Apple, Google and Microsoft." 

Table 1. Mobile App Store Downloads, Worldwide, 2010-2016 (Millions of Downloads)

2011

2012

2013

2014

2015

2016

Free Downloads

22,044

40,599

73,280

119,842

188,946

287,933

Paid-for Downloads

2,893

5,018

8,142

11,853

16,430

21,672

Total Downloads

24,936

45,617

81,422

131,695

205,376

309,606

Free Downloads % 

88.4% 

89.0% 

90.0% 

91.0% 

92.0% 

93.0%

Source: Gartner (September 2012)

Besides a few major app stores from global OS vendors (such as Apple's App Store, Google Play and Microsoft's Windows Phone Marketplace), Gartner analysts said there are also stores from third parties that attract users with their brands or take advantage of the lack of dominant players in some markets. 

"Amazon has appealed to users with its strong brand, global presence and a good selection of high-quality content while Facebook's recently launched App Center — supporting both mobile devices and desktops — will become a powerful competitor due to its strong brand and leading position in social networking and gaming," said Ms. Shen. "In China, there is a boom market of independent Android stores, due to the lack of presence of Google Play and 'weak' stores from CSPs. We expect to see more new entrants to the market, aiming to deepen relationships with their customers and/or to capture some of this growth market." 

Using an in-app purchase business model is a more effective method of converting casual app users into paying customers and then retaining them with good user experience and continued product updates. This is a different approach from upfront payment where users pay and download, and can be disappointed by the experience and never come back. In-app purchasing opens the door to a recurring revenue stream for developers, but app performance and design will always be the most important factor when attracting new users and keeping them satisfied. 

In-app purchases will drive 41 percent of the store revenue in 2016. While the market is moving toward free and low-priced apps, in-app purchases will drive downloads as well as app store revenue. Gartner expects the number of downloads featuring in-app purchase will increase from 5 percent of total downloads in 2011 to 30 percent in 2016, and its contribution to the store revenue will increase from 10 to 41 percent in the same period. 

"App stores should support in-app purchases as soon as possible as this offers a new path of monetization, and helps to attract developers as they attempt to extend an app's momentum by providing easy access to upgraded services and functionality," Mr. Blau said. 

Additional information is available in the report "Market Trends: Mobile App Stores, Worldwide, 2012" at http://www.gartner.com/resId=2126015

Gartner analysts will examine the key issues around mobility at Gartner Symposium/ITxpo.

About Gartner Symposium/ITxpo
Gartner Symposium/ITxpo is the world's most important gathering of CIOs and senior IT executives. This event delivers independent and objective content with the authority and weight of the world's leading IT research and advisory organization, and provides access to the latest solutions from key technology providers. Gartner's annual Symposium/ITxpo events are key components of attendees' annual planning efforts. IT executives rely on Gartner Symposium/ITxpo to gain insight into how their organizations can use IT to address business challenges and improve operational efficiency.

Additional information for Gartner Symposium/ITxpo 2012 in Orlando, October 21-25, is available at www.gartner.com/symposium/us. Follow news, photos and video coming from Gartner Symposium/ITxpo on Facebook at http://www.facebook.com/#!/GartnerSymposium, and on Twitter at http://twitter.com/Gartner_inc and using #GartnerSym. 

Members of the media can register for the event by contacting Christy Pettey at christy.pettey@gartner.com

Upcoming dates and locations for Gartner Symposium/ITxpo include:

August 28-30, Cape Town, South Africa: www.gartner.co.za

October 3-5, Tokyo, Japan: www.gartner.com/jp/symposium

October 10-12, Goa, India: www.gartner.com/in/symposium

October 21-25, Orlando, Florida: www.gartner.com/us/symposium

October 29-31, Sao Paulo, Brazil: www.gartner.com/br/symposium

November 5-8, Barcelona, Spain: www.gartner.com/eu/symposium

November 12-15, Gold Coast, Australia: www.gartner.com/au/symposium

March 5-7, 2013, Dubai, UAE: www.gartner.com/technology/symposium/dubai/ 

Gartner will host a complimentary webinar on September 27 at 9:30 a.m. EDT titled, “The Evolution of the Powerful New Nexus: Gartner Symposium/ITxpo 2012 Preview”. Peter Sondergaard, senior vice president and global head of research at Gartner, will discuss why the Nexus of Forces is such a crucial concept for all CIOs and IT leaders and how it has evolved. He will also explain why this year’s theme “Focus, Connect, Lead” is so central to Gartner Symposium/ITxpo 2012. To register for this free webinar, please visit http://my.gartner.com/webinardetail/resId=2142416.

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