The Mobile Application Marketplace

•          Total downloads from app stores will grow for a few years then decline, with compound annual growth over the next five years of just a little more than 1%.

•          Existing and new developers will continue to distribute through app stores, but others will move offerings to online stores or give up on app stores altogether.

•          ABI Research believes this will take place as developers increasingly distribute apps from online web sites starting next year.                                             

Drivers:

•          Consumer acceptance – The vast majority of Smartphone owners (72%) have downloaded applications to their devices, according ABI Research’s most recent consumer survey

•          Plenty of apps – Apple’s App Store boasts some 200,000 apps, and competing stores such as Android now offer tens of thousands

•          Affordability – Most apps sell for nominal prices or are free, reducing cost as a barrier to adoption

•          Marketers connecting – Through mobile applications marketers can engage with their target audiences in a way that allows the brand to focus and control the experience

Inhibitors:

•          Most people do not have smartphones – Despite the rapid increase in smartphone adoption, most people own devices that lack a smartphone operating system that enables the downloading of third-party applications

•          Fragmented device and platform landscape – Multiple devices and OS platforms make it difficult to target a wide audience with a single application, except for the iPhone

•          Cost – Development costs alone for a mobile application can range from $40,000 to $250,000 or more; couple that with required promotional budgets and the need to provide several versions of an app for the various platforms and the outlay becomes significant

•          Discovery – Given the surging number of apps available in stores, apps can go unnoticed, compelling promoters to spend on marketing campaigns to drive downloads