Early this morning Dean Takahashi wrote an article for Venture Beat on Mobile App projections. Takahashi said that mobile apps are expected to hit $70 billion in revenue by 2017.
From the article:
Mobile apps are on a path to reach $70 billion in annual revenue by 2017. And while games drive the majority of app revenue now, they won’t stay on top of the heap much longer.
Digi-Capital, an investment bank for mobile apps and games, said in its first quarter mobile apps study that non-game apps could double their percentage share of total app revenue from 26 percent to 51 percent by 2017, thanks to a 61.3-percent compound annual growth rate from 2013 to 2017.
(image credit Digi-Capital)
He goes on to look at the significant revenue generator free apps with in app purchases bring to the revenue table. These in app purchases have the greatest effect with games and not so much outside the gaming app arena.
Free apps with in-app purchases account for more than 90 percent of revenue, but that’s not the case in all app categories. In-app purchases have worked most effectively for monetizing games, accounting for 40 percent of downloads and 74 percent of revenues. But in-app purchases are less effective outside of games, accounting for 60 percent of downloads and only 26 percent of revenue for non-game apps.
Read the full article here