App sales revenues should reach $51 billion worldwide in 2016
Revenues from app sales are expected to reach $51 billion worldwide this year, according to a forecast from analytics firm App Annie, which projects revenues of $101 billion by 2020. And research firm Gartner predicts that businesses will dedicate as much as one-quarter of their enterprise IT budgets to mobile app development by 2017.
Tech Crunch reports that demand for apps is at an all-time high, according to the latest research, as a result of “more people, carrying more devices, using them more often, for more purposes.” And Apple’s App Store sales are up more than 40 percent from last year. Meanwhile, by 2016 the estimated total market size for mobile apps should reach $143 billion.
While only a small percentage of time spent in apps takes place in branded apps, it’s some of the most valuable time spent to the retail, banking and hotel customers using them. For example, in 2015 an estimated $300 billion in e-commerce sales were transacted through mobile apps while $34 billion was spent in advertising surrounding app content and communities.
Smartphone users typically use fewer than 30 apps per month, and are dominated by “umbrella” communication and social networking apps like Facebook, Messenger, and WhatsApp.
But all apps are not created equal, and a small number of app companies are dominating the scene, with 10 of the 12 top apps owned by Apple, Facebook, or Google. TechCrunch asserts, “the market isn’t quite winner-take-all, but it’s getting close.” Meanwhile, however, even with functionality of apps on the rise, overall app development and maintenance costs are decreasing, making apps more economically feasible.
That means that apps that bolster customer loyalty, aid omnichannel and spontaneous commerce, and help manage finances can be good investments for user and business alike. And since app users are some of retailers’ most valuable customers, spending an estimated $116 per transaction on mobile for every $100 spent on desktop, according to retargeting company Criteo, it would behoove retailers to pay close attention to app development. Shoppers who use apps are also more likely to act upon intent, converting at 3.7 times the rate of shoppers shopping on the mobile web.
