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Mobile App Stores - A New Mobile Web?
Pyramid Research, Inc, June 2010, Pages: 94
Mobile applications (apps), both free and paid, have experienced exponential growth in recent years. Pyramid Research is forecasting that this growth curve will continue through 2014, though the mobile apps market will evolve differently in different regions. A key driver of mobile app growth is the app store concept popularized by Apple and subsequently adopted by all the major mobile players. Operator portals will need a mixture of agility, compelling apps and local market sensitivity to keep pace. Meanwhile, app developers stand to benefit the most from increasingly aggressive competition for mobile app revenue.
Mobile App Stores: A New Mobile Web? provides in-depth, up-to-the-moment analysis of the mobile content marketplace, focusing on the app stores of major market players such as Apple, Nokia, Research In Motion (BlackBerry), and Microsoft, as well as operator app stores. In addition, the report looks at the sea change in mobile advertising that may be coming with the release of Apple’s OS 4.0 for the iPhone.
Key findings include:
- The impact of application (app) stores on the mobile market should not be understated. We estimate that the total download volume (free and paid) will increase by a factor of seven between 2009 and 2014.
- Although paid apps have increased substantially in volume with the emergence of app stores, free apps have really boomed. In 2010 we project that 36% of paid apps will be downloaded through app stores and 86% of free downloads will take place through them. Advertising revenue as a result has increased substantially, and app stores are working on monetizing this opportunity.
- The mobile apps market will develop in different ways in different regions. These differences are governed by factors such as the penetration of smartphones, share of smartphone platforms (operating systems), operator positioning/strategy and the adoption of different payment methods.
- App stores are an important element in the mobile value chain. A wide range of easily accessible apps has quickly become a prerequisite for handset and platform vendors. Vendors also gain a new revenue stream, a powerful customer loyalty tool, an important gateway to additional revenue streams and an attractive resource for potential operator partnerships.
- Operator app stores have a number of strengths but also face important challenges. Attracting developers is perhaps the most difficult challenge given the lead the vendors have established, platform fragmentation and limited adoption of devices with operator stores enabled.
- The Wholesale Applications Community (WAC) is an attractive vision but faces significant practical challenges. Although the platform is well supported, the different vested interests need to agree on technical specifications, a road map, support, funding, security and payment mechanisms, among other aspects.
- Operators need to manage mobile app downloads through their own stores and their on-deck portals. In progressive markets, operators will likely migrate downloads from the portal to their store as quickly as possible and so be able to dismantle their portals to lower costs. However, most operators with their own store will have to manage the portal as well for several years. In less-developed markets, portals will remain the principal mobile app download channel.
- Developers will be the biggest winners, not only as they gain a higher portion of revenue but also because competition among stores will greatly improve support, payment terms and transparency. These factors will be crucial in enabling developers to decrease their costs and focus on creating innovative and entertaining apps.
- Third-party stores and aggregators will lose out more and more to vendor and operator stores. Consolidation has already started, and we believe the focus of third party stores and aggregators should move to partnering with these new competitors rather than competing with them in the direct-to-consumer space. Operators and vendors are simply too well-placed to embed their own stores onto devices, and they have stronger brands. The case of Getjar, however, is unique, given its size and focus on free apps.
Key questions answered
- What is the current state of mobile apps?
- Are free or paid apps more popular with users?
- What does the app store landscape look like?
- Which players in the mobile app space are most successful, and in which regions?
- How can operators capture a greater portion of revenue from mobile apps?
- How will mobile advertising develop in the next year?
- Apple’s App Store
- Google’s Android Market
- Nokia’s Ovi
- BlackBerry’s App World
- Microsoft Marketplace
- Operator app stores
This report will help you think through ways to capture a greater share of mobile app revenue by positioning your operator portals to compete more effectively with current app stores.
Discover the state of the market for paid mobile apps and which platforms are poised for healthy growth in the coming years.
Section 1: Overview and background
1.1 How Apple’s App Store changed the mobile content marketplace
1.2 Defining the app store
1.3 App store launches to date
1.4 Comparing app stores
1.5 A successful store enjoys virtuous demand-and-supply interplay
Section 2: Analyzing the value chain
2.1 Value chain overview
2.2 Analysis of competitive dynamics for different value chain elements
2.3 Value chain revenue breakdown and evolution
Section 3: Market size and forecast
3.1 Methodology and assumptions
3.2 Global market size and forecast
3.3 Regional market size and forecast
Section 4: Summary profiles
4.1 Apple’s App Store
4.1.1 Profits and strategy
4.1.2 Developers and apps
4.1.3 Billing and operator relationships
4.1.4 Regional analysis
4.1.5 Future development
4.2 Google’s Android market
4.2.1 Profits and strategy
4.2.2 Developers and apps
4.2.3 Billing and operator relationships
4.2.4 Regional analysis
4.2.5 Future development
4.3 Nokia’s Ovi
4.3.1 Profits and strategy
4.3.2 Developers and apps
4.3.3 Billing and operator relationships
4.3.4 Regional analysis
4.3.5 Future development
4.4 BlackBerry’s App World
4.4.1 Profits and strategy
4.4.2 Developers and apps
4.4.3 Billing and operator relationships
4.4.4 Regional analysis
4.4.5 Future development
4.5 Microsoft Marketplace
4.5.1 Profits and strategy
4.5.2 Developers and apps
4.5.3 Billing and operator relationships
4.5.4 Regional analysis
4.5.5 Future development
4.6.1 Profits and strategy
4.6.2 Developers and apps
4.6.3 Regional analysis
4.7 Operator app stores
4.7.1 Developers and apps
4.7.2 Softbank’s Widget Store
4.7.3 China Mobile’s Mobile Market
4.7.4 Vodafone’s 360
Table of exhibits
Exhibit 1.1: Timeline of major app store launches
Exhibit 1.2: Comparison of app stores by compatible device installed base and supported platforms
Exhibit 1.3: Successful app store virtuous circle
Exhibit 1.4: Installed base of devices with store app, by app store, 2009-2011
Exhibit 1.5: Breakdown by app store of the installed base of on-device stores by region, 2010
Exhibit 1.6: App store developer registration charges
Exhibit 1.7: Number of apps and downloads per user per month
Exhibit 1.8: App store category distribution, May 2009 and March 2010
Exhibit 1.9: Billing method by app store
Exhibit 1.10: Comparison of app stores, February 2010
Exhibit 2.1: Mobile market value chain elements
Exhibit 2.2: Fishlabs iPhone games by type
Exhibit 2.3: Gameloft total and iPhone revenues, 2007-2009
Exhibit 2.4: Joby Gorillapod camera
Exhibit 2.5: Operator mobile apps
Exhibit 2.6: Orange France iPhone apps
Exhibit 2.7: Global mobile handset volume share, 2009
Exhibit 2.8: Hardware vendors in the value chain
Exhibit 2.9: Global mobile apps download revenue: Portals vs. stores, 2008-2014
Exhibit 2.10: Mobile app download revenue breakdown by value chain element, 2008-2014
Exhibit 2.11: Mobile apps download revenue breakdown by type of company, 2008-2014
Exhibit 2.12: Vendor store cumulative revenues, 2010-2014
Exhibit 3.1: Market size and forecasting methodology
Exhibit 3.2: Mobile subscriptions, smartphone installed base and smartphone percentage of subscriptions, 2008-2014
Exhibit 3.3: Smartphone* installed base breakdown by operating system, 2008-2014
Exhibit 3.4: On-device app stores by operator and vendor, 2008-2014
Exhibit 3.5: Total mobile app downloads through stores and operator portals, 2008-2014
Exhibit 3.6: Free vs. paid mobile app downloads, 2008-2014
Exhibit 3.7: Mobile paid app download revenue, 2008-2014
Exhibit 3.8: Mobile app download revenue by region, 2008-2014
Exhibit 3.9: North American mobile operating system share, 2009 & 2014
Exhibit 3.10: North American mobile app downloads by channel, 2009-2014
Exhibit 3.11: North American mobile app downloads revenue by channel, 2009-2014
Exhibit 3.12: EMEA mobile operating system share, 2009 & 2014
Exhibit 3.13: EMEA mobile app downloads by channel, 2009-2014
Exhibit 3.14: EMEA mobile app downloads revenues by channel, 2009-2014
Exhibit 3.15: Asia-Pacific mobile operating system share, 2009 & 2014
Exhibit 3.16: Asia-Pacific mobile app downloads by channel, 2009-2014
Exhibit 3.17: Asia Pacific mobile app downloads revenue by channel, 2009-2014
Exhibit 3.18: Latin American mobile operating system share, 2009 & 2014
Exhibit 3.19: Latin American mobile app downloads by channel, 2009-2014
Exhibit 3.20: Latin American mobile apps download revenue by channel, 2009-2014
Exhibit 4.1: App Store history and milestones
Exhibit 4.2: Annual Apple revenue breakdown in the year ending September* 2009
Exhibit 4.3: App Store downloads forecast by region, 2010
Exhibit 4.4: Android market history and milestones
Exhibit 4.5: Android Market downloads forecast by region, 2010
Exhibit 4.6: Ovi history and milestones
Exhibit 4.7: Ovi Store downloads forecast by region, 2010
Exhibit 4.8: App World history and milestones
Exhibit 4.9: RIM revenue breakdown by segment, Q3 2009
Exhibit 4.10: BlackBerry App World downloads forecast by region, 2010
Exhibit 4.11: Microsoft Marketplace downloads forecast by region, 2010
Exhibit 4.12: Getjar history and milestones
Exhibit 4.13: Getjar downloads estimate by region, 2009
Exhibit 4.14: Operators and details of app store launches
Free apps will dominate the mobile app market over the next five years, creating a potentially serious problem for network operators hoping to create new revenue by selling apps to mobile users, according to a new report.
Mobile App Stores: A New Mobile Web? is a new report that provides in-depth, up-to-the-moment analysis of the mobile content marketplace, focusing on the app stores of major market players like Apple, Google, Nokia, Research In Motion (BlackBerry), and Microsoft, as well as operator app stores. In addition, the 94-page report looks at the sea change in mobile advertising that may be coming with the release of Apple's OS 4.0 for the iPhone.
Pyramid estimates that the total download volume (free and paid) will increase by a factor of seven between 2009 and 2014 from 5.7 billion to 41.1 billion, notes Jan ten Sythoff, analyst at large for Pyramid Research and author of the report. "Although paid apps have increased substantially in volume with the emergence of app stores, free apps have really boomed, revolutionizing the mobile advertising market," Sythoff says. Including operator portals, the proportion of free downloads increased from around 30 percent in 2008 to 54 percent in 2009, and it is expected to stabilize at around 80 percent in 2014.
"This is a key trend, and it will drive new revenue streams, namely from advertising," say Sythoff. "We believe, for instance, that Apple's acquisition of mobile advertising network Quattro Wireless in early 2010 demonstrates that the company wants to monetize the billions of free apps being downloaded onto iPhones."
"Attracting developers is perhaps the most difficult challenge for operators given the lead the vendors have established, platform fragmentation and limited adoption of devices with operator stores enabled," Sythoff explains. "In regions where the vendors are already well established, such as the U.S., it will be difficult for operators to establish their own stores. In other regions, vendors have yet to establish themselves, giving operators the opportunity to take the initiative."
- America Móvil
- Bright AI
- China Mobile
- EA Sports
- Far EasTone Telecom
- Golden Gekko
- KT Telecom
- NTT Docomo
- Oi Brazil
- Quattro Wireless
- SK Telecom
- Sony Ericsson
- Virgin Mobile