Mobile app revenues are expected to climb to more than USD $25bn by 2014 – fuelled by the launch of a raft of new application stores.
But while one-off downloads currently account for the majority of revenues, that will change with the increasing utilization of in-app billing, according to Juniper Research.
Its Mobile Applications & Apps Stores report suggests that rising revenues from additional mobile content will see value-added services (VAS) providing the dominant revenue stream by 2011.
It also notes that many Tier 1 operators will seek to deploy their own app stores in a bid to maintain content revenue share.
However, the report’s author, Dr Windsor Holden, said that in the longer term, the greatest benefits to operators would be derived from data revenues associated with app usage rather than from the retail price of apps and content.
She said this was providing that the operators rejected the walled garden approach.
"Data revenue growth is dependent upon operators embracing policies which enable open access – a policy which also involves facilitating app stores which compete with their on-portal offerings," she said.
The report also noted that, given the fact that app stores currently cater exclusively for smartphones, then operators, developers and content providers would be unwise to ignore opportunities from traditional app and content distribution and monetization channels.
Other findings from the Juniper report include:
- Games will remain the largest category in terms of overall app downloads and revenues, although Multimedia & Entertainment apps will attract the greatest share of VAS revenues from 2009 onwards
- App stores present a significant challenge to traditional content aggregators who may be obliged both to expand the range of their content portfolios and to amend their business models to remain viable