German app market breaks €1bn mark for the first time

Watching TV may still be the country's favourite leisure pursuit, but things are changing fast.
Written by Sara Zaske, Contributor

Germans love their tablets and smartphones, and it's starting to show. By the end of this year, Germany's spending on mobile apps is expected to reach €1.3bn, a 41 percent increase over 2014, according to market research firm research2guidance.

It's the latest mark of ongoing growth: in 2013, the German app market was valued at €547m, and in 2014, it rose to €910m, before topping the €1bn-mark this year.

"The apps boom continues unabated," said Bernhard Rohleder, CEO of the German digital industry group Bitkom. "Increasing use of smartphones and tablets is behind this growth. With wearables such as smartwatches and fitness bands, the ecosystem is now once again significantly expanding around apps."

While many apps are free to download, they generate money in other ways. In Germany, more than 70 percent of the projected €1.3bn in app revenue this year is coming from in-app-purchases, such as when a user buys virtual goods or digital currency to be used within the app.

The other 30 percent of app revenue in Germany is generated mainly through apps come with a purchase price (€193m) and with another €150m coming from in-app advertising.

Other studies are revealing that online use is increasing in Germany. Today three out of four Germans use the internet at least once a week, according to a study of free time conducted by the Foundation for Future Studies, a British American Tobacco iniative. In this year's study, using the internet rose to fourth place among Germans' preferred leisure activities. (Watching TV is still number one, followed by listening to the radio, and talking on the phone).

In just five years, the number of German internet users has increased by 25 percent. And if the age demographics are any indication, it will continue to grow as 99 percent of German teens and young adults are now online.

That likely means more good news for app publishers in the future, though research2guidance warns app makers to "approach the market with caution and humility, simply publishing apps will not generate overnight success".

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