How Big is the Mobile Apps Business?

It's getting harder to figure out how big the mobile apps business is, despite its growth. Actually, it is because of its growth that the tracking is becoming more difficult. A few years ago, one only had to track sales of mobile apps, or use of mobile apps, or downloads of mobile apps.


In 2012, mobile application revenues from in-app purchases will pass pay-per-download revenues, according to ABI Research.  One might argue that "revenue is revenue," but there is a big difference between gross revenue and net revenue. 


To be sure, apps sold in most app stores represent about 70 percent "net" proceeds for the app supplier. But proceeds from in-app purchases can be a different story, depending on what it is that is being sold. Up to this point, arguably most in-app purchases were digital goods designed to be used inside an app. 


But someday that will change, and more of the in-app sales volume will be of all sorts of products, and one has to anticipate that more of the sales volume over time will be of products that do not provide 70-percent "net" proceeds to an app provider, because the products are created by third parties, while the app serves mainly as a sales channel. 


In such cases, revenue for the sales partner will be quite minimal, compared to sales of in-app digital goods that essentially are parts of the app experience. 


“As a revenue model, in-app purchase is very limited today,” says Mark Beccue, ABI Research senior analyst, mobile services. “The vast majority of current in-app revenue is being generated by a tiny percentage of people who are highly-committed mobile game players.  We don’t believe the percentage of mobile game players making in-app purchases will grow significantly, so for in-app purchase revenues to grow, mobile developers other than game developers must adopt it.”


Despite these challenges, in-app purchases will successfully spread outside of games. Total mobile app revenues from pay-per-download, in-app purchase, subscriptions, and in-app advertising will soar over the next five years, growing from $8.5 billion in 2011 to $46 billion in 2016, according to 


A 2010 study by Chetan Sharma Consulting, commissioned by the GetJar app store, projected that the global mobile apps economy is set to be worth $17.5 billion by 2012. 


Mobile app downloads were expected to increase from over seven billion downloads in 2009 to almost 50 billion in 2012. 


The study also found that in 2008 there were just four apps stores, while there are 38 in 2010. 


ExperTech, a recruiting firm for information technology professionals, notes that  “82 percent of our clients have said they plan on developing a mobile app in 2012,” says Joe Budzienski, XperTech EVP.

And it would be hard to miss the dramatic growth of the mobile apps trend. Trade group TechNet says mobile app development is creating jobs at a dramatic pace.

According to a new TechNet study, there are now roughly 466,000 jobs in the so-called “app economy” in the United States, largely defined as jobs involved in the creation of apps or jobs at firms that create and sell apps. 


That’s a dramatic improvement over 2007, when the number of people involved in the mobile apps business arguably was close to zero. Mobile app employment study