Mobile app revenues to reach $25bn by 2014

Direct and indirect revenues from mobile applications are expected to exceed $25 billion by 2014, with growth fuelled by a raft of store launches targeting both high end and mass market handsets, according to a new report from Juniper Research.

The mobile applications report found that while the overwhelming majority of app revenues are currently accrued from one off downloads, the increasing utilisation of in-app billing to enable incremental revenues from additional mobile content will see value added services providing the dominant revenue stream by 2011. It also noted that many tier one operators would seek to deploy their own app stores in a bid to maintain content revenue share.

However, the Juniper mobile applications report stressed that in the longer term, the greatest benefits to operators would be derived from data revenues associated with app usage rather than from the retail price of apps and content, providing that the operators rejected the walled garden approach.

According to report author Dr Windsor Holden: “Data revenue growth is dependent upon operators embracing policies which enable open access, a policy which also involves facilitating app stores which compete with their on-portal offerings.”

In addition, the report noted that, given the fact that app stores currently cater exclusively for smartphones, then operators, developers and content providers would be unwise to ignore opportunities from traditional app and content distribution and monetisation channels.

Other findings from the Juniper report include: Games will remain the largest category in terms of overall app downloads and revenues, although Multimedia & Entertainment apps will attract the greatest share of VAS revenues from 2009 onwards; and app stores present a significant challenge to traditional content aggregators who may be obliged both to expand the range of their content portfolios and to amend their business models to remain viable.