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IHS increases Apple's predicted future share of 2011 app market to 76%

post #1 of 4
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IHS, the market research firm which recently acquired iSuppli, has issued a new report indicating that Apple's dominance among mobile software app markets will continue stronger than the group originally projected just over two months ago.

The report maps the future of Apple's App Store, Google's Android Market, Nokia's Ovi Store and RIM's BlackBerry App World, noting that "Combined revenue for the four stores in 2011 will rise from $2.1 billion in 2010 and from $830.6 million in 2009. Application store revenues were first tracked in 2008 in a market worth just $206.01 million, with the Apple App Store the only viable presence at that time."

In February, the group published figures (shown below) that indicated Apple had a commanding lead in the market for app store revenues, accounting for 82.7 percent of global app revenues in its App Store.

At the time, the firm said Apple was expected to maintain more than half of all app sales through 2014, but the latest release from the company predicts Apple will "take in 76 percent of revenue this year and retain 60 percent market share by 2014, despite efforts by the other stores to match Apples ability to monetize its users."



Growth slowing

The rate of Apple's growth will slow as the market matures, IHS believes. While last year, Apple's App Store revenues grew by 131.9 percent, IHS says that its 2011 App Store growth will slow to 63.4 percent, increasing from last year's figure of $1.78 billion to $2.91 billion for the current year.

Google's Android growth is also slowing, and is expected to drop from its phenomenal 861.5 percent growth in 2010 to an increase of 295.4 percent this year, arriving at revenues of $425 million.

That is expected to be enough to allow Android to outpace RIM's currently second place store (with projected 2011 revenues of $279 million) and the current third place store run by Nokia (which IHS says will earn $201 million).

By the end of the year, IHS says Apple users will make 10.3 billion downloads, while Android users will download 5.8 billion apps, contributing to a total of 18.1 billion apps across all platforms, nearly double the 9.5 billion apps from last year. by 2014, the firm says 33 billion apps will be acquired each year.

Despite the volume of apps moving around, IHS says Apple will continue to control the 76 percent of app-related revenues this year, and continue to maintain a lock on 60 percent of all mobile revenue in 2014.

The firm added that "Apple also will lead the way with revenue gained from in-app purchasesor additional purchases made within a paid application, such as bonus game levelswhich will serve as a key growth driver for revenue up to 2014."

post #2 of 4
The fact that their predicted numbers changed dramatically after two months, they are admitting that they are only making wild guesses for attention.
That being said, I have no reason to doubt that their guess is particularly off-base...

Did they say what caused them to reassess their numbers?
Progress is a comfortable disease
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Progress is a comfortable disease
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post #3 of 4
Quote:
Originally Posted by Bageljoey View Post

The fact that their predicted numbers changed dramatically after two months, they are admitting that they are only making wild guesses for attention.
That being said, I have no reason to doubt that their guess is particularly off-base...

Did they say what caused them to reassess their numbers?

I assume they reassessed the kind of growth that was really happening in the Android market and realized that 99.99% of it will never generate any revenue. Their previous report saw growth in the Android market having the same impact on revenue as growth in the App Store, it clearly does not.

This seems like a better comparison, but all of these analysts are just guessing.
post #4 of 4
They have slightly underestimated iOS's growth rate and slightly overestimated Android's.

One thing that "hurts" iOS (and Android I think) is the ability to use an application on multiple devices. This slows growth quite a bit.

But given that, I would expect 2011 App Store revenue to top 3.2 billion and Android to be closer to 0.35 billion.
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