Despite Apple’s lead in the tablet market taking its first serious dent in Q3, the iPad’s dominance of the tablet market will continue for the next five years, according to Strategy Analytics. The launch of the iPad mini and “continued dominance” of the iPad will ensure Apple’s iTunes App Store remains the “premier destination” for tablet downloads through to 2017, the analyst predicts.
In its Mobile Apps Download Forecast: 2008 – 2017 report, Strategy Analytics forecasts a total of more than 350 billion smartphone and tablet app downloads between 2008 and 2017. The analyst predicts the Google Play store will account for more than 45 percent of phone-related downloads in 2017, while Apple’s iTunes Store will account for 56 percent of tablet downloads in five years’ time.
Over the 2008 to 2017 time-period Strategy Analytics says paid downloads will generate more than $57 billion globally. However it expects the paid app market to be declining by 2017 as it forecasts free apps will represent more than 91 percent of all downloads by then.
“Paid downloads remain an essential component of the app ecosystem,” noted Josh Martin, Director of Apps Research at Strategy Analytics, in a statement. “Paid downloads will remain an important way for smaller developers to monetize their efforts. For developers committed to paid downloads transitioning to tablets may be the smartest way to preserve the business model over the long term.”
The analyst believes that the average selling price of all downloads will drop to just 8 cents for smartphone apps by 2017, as the proportion of free app downloads continues to grow. This revenue decline, coupled with an expected increase in app store maintenance costs — owing to the requirement for more app approval personnel, higher marketing costs etc — could force app stores to “consider new revenue streams or higher revenue splits”, says the analyst.
“App Stores will also see a revenue crunch as more revenue is earned from advertising – revenue generated outside the bounds of the app store – and will need to prepare,” Martin added. “Newer platforms such as Windows 8, BlackBerry 10, Tizen and Firefox are building their operating systems and storefronts with this knowledge which should go a long way to making them attractive to developers and end users.”