The mobile app economy will swell to $US79 billion by 2020, marking a steep acceleration on an already impressive growth profile. That’s the view of research outfit Ovum, which this week revealed its predictions.
According to the company, “Global mobile app revenue will grow by 2.2 times over the next five years, from $US36 billion in 2015 to $US79 billion in 2020, according to global analyst firm Ovum. This is compared to a 1.8 times increase in the number of app downloads — from 211 billion in 2015 to 378 billion in 2020.”
In fact the mobile app market is set to grow more over the next five years than since its inception eight years ago, say the researchers. “More than three times as much revenue will be generated between 2016 and 2020 than was generated between 2008 and 2015, and there will be 2.5 times as many downloads.”
Guillermo Escofet, principal analyst in Ovum’s Digital Media team and author of the report “App Revenue to Double by 2020, Outpacing Download Growth” said that even as downloads slow revenue will surge.
“Downloads will, however, see a marked slowdown in mature smartphone markets as they approach saturation and as user acquisition costs escalate, placing a greater emphasis on download quality rather than quantity,” he said.
“Revenue, on the other hand, will continue on a higher growth trajectory as people spend more time on apps and as in-app spending intensifies.”
Emerging markets will register the steepest growth rate over the next five years in both downloads and revenue — twice as steep as developed markets in the case of the latter. However, the developed world will continue to capture the largest share of revenue.
Downloads, on the other hand, will continue to be dominated by emerging markets led by China, according to the researchers, and the emerging markets’ share of both downloads and revenue will increase.
China accounts for the largest share by far of app installs throughout the forecast period from 2013 to 2020, and indeed it currently accounts for over half of installs.
Escofet said the bulk of this is driven by its huge Android independent app store sector. “China will also end up as the top-grossing country, helped by its huge mobile gaming industry.”