Apps are now a $15 billion industry, 80% comes from the freemium model
Apple's humble App Store spearheaded the bite-size way of utilizing the small computers in our pockets instead of the one-size-fits-all approach we were used to on our PCs. A few years later, and apps are now a $15.5 billion industry, who would've thought?
Research firm IHS is reporting that be the end of 2013, that's how much will be spent on apps globally, with the vast majority of the money - 85% of the proceeds, in fact - going to iOS and Android developers, of course. To put things in perspective, $15.5 billion is more than the total app revenue from 2010, 2011 and 2012 combined! The growth this year has been breathtaking, with more than 90 billion apps downloaded in total, almost double the last year amount.
The tide has turned on the way developers profit from apps, too, with games and in-app purchases accounting for 80% of the global revenues. Candy Crush, Hay Day and Clash of Clans come at the top of the list for most downloaded. "Games count for the vast majority of revenue for Google and Apple stores," say the analysts. "Maybe two or three years ago, you would pay $1 or $2 for a game, but there was no opportunity for them to charge you more. Now they give it to you for free, then keep charging you for additional features.”
Mobile ad revenue is also growing, and will be a $6 billion industry by year-end, which bodes well for Google's bet on Android, and Facebook's mobile strategy.