89% of App Store Downloads are "Free"

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.

"In terms of the apps that consumers are buying, 90 percent of the paid-for downloads cost less than $3 each," says 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. Demand for apps overall will still be dominated by Apple, Google and Microsoft sites, though important third party stores will operate. 

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)

"Amazon will become a powerful competitor," says Shen. "In China, there is a boom market of independent Android stores, due to the lack of presence of Google Play and 'weak' stores" operated by the mobile service providers.

As you might guess, giving away apps implies some other revenue model, and these days that largely means in-app sales of content goods or products. 

In-app purchases will drive 41 percent of the store revenue in 2016, Gartner expects.

Gartner expects the number of downloads featuring in-app purchase will increase from five 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.