Mobile App Market: $29.5B by 2013, says Gartner

There’s lots of money to be made in mobile apps, but these apps still have a ways to go to hit their fiscal peak. Today, about 80% of apps are free, and mobile phone users will download more than eight billion applications this year, raising...

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There’s lots of money to be made in mobile apps, but these apps still have a ways to go to hit their fiscal peak. Today, about 80% of apps are free, and mobile phone users will download more than eight billion applications this year, raising spending in app stores to $6.2 billion, according to a new Gartner report.

Worldwide mobile application stores’ download revenue exceeded $4.2 billion in 2009 and will grow to $29.5 billion by the end of 2013.While advertising revenue in those apps is expected to generate just $.6 billion worldwide this year, the report predicts that advertising-sponsored mobile applications will generate almost 25 per cent of mobile application stores revenue by 2013 (view report release).

“As smartphones grow in popularity and application stores become the focus for several players in the value chain, more consumers will experiment with application downloads,” said Stephanie Baghdassarian, research director at Gartner, in the report’s release. “Games remain the No. 1 application, and mobile shopping, social networking, utilities and productivity tools continue to grow and attract increasing amounts of money.”

Average smartphone users will become less tech-savvy as smartphones come down in price to have a mass market appeal and these users will be more reluctant to pay for applications, according to the research firm. The company said early smartphone owners were more willing to pay for mobile applications and trusted the billing system.

The app downloads show now signs of stopping, says the Garnter report, with more than 21 billion downloads of mobile apps by 2013. Earlier this month, Apple alone marked 3 billion downloads since its App store opened 18 months ago. The Cupertino, Calif. company is earning $2.4 billion a year from the mobile apps, according to one estimate.

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