App revenue booms, but who is really making money?

App revenues to hit $99bn in four years and it's not just Apple and Google that will be doing well out of it.
Written by Colin Barker, Contributor

The annual revenue from apps installed on smarphones and tablets could reach $99bn by 2019, according to analysts Juniper Research.

While games are still set to dominate mobile for at least the next five years, Juniper believes the highest growth will be experienced in so-called lifestyle applications, such as dating, navigation and ebooks.

But according to Juniper over the past 18 months Apple and Google's hold over the global app distribution market has been dramatically disrupted, at least in terms of download volumes the analysts said.

That disruption stems directly from the mass adoption of apps in China and "from the unique dynamics of that market" - and this will severely limit the opportunities for Google.

China alone accounted for 59 percent of global app downloads in 2014, Juniper said, and this was "bolstered by burgeoning smartphone/tablet adoption and a consumer enthusiasm for apps unmatched elsewhere".

Chinese consumers now download, on average, nearly 90 apps per mobile handset or tablet per annum, against a global average which is just over a quarter of that - 28.

But whereas in most markets, Google's Play store has become the benificiary of the consumer desire for apps in China access to Play is severely restricted by the Great Firewall of China, allowing local players to gain traction.

In 2014, Baidu became the second largest distributor of apps worldwide, said Juniper, while Qihoo, Tencent, Wandoujia and Xiaomi's Mi store all achieved more than eight billion downloads. In Qihoo's case this was more than 20 billion.

The surge of activity in China means that no other market now accounts for even 10 percent of app downloads. In 2014, the other largest markets by app downloads were the US with eight percent, and South Korea, Germany and the UK all with two percent each.

Further Reading:

Smartphones drive Huawei profits up 33 percent for 2014

Review calls for taxi reform to accommodate ride-sharing apps

Microsoft delivers Windows 10 tools for building universal applications

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