Apps

Mobile app revenue projected to explode by 2016

The mobile application space's revenue is predicted to reach $46 billion by 2016, as the big boys jockey on advertising and other revenue streams.
An almost 550 percent growth in revenue over a mere five years is practically unheard of in any industry, but that is what tech market watcher ABI Research is predicting for the mobile application space by 2016, according to a report at CNET News. So how can developers cash in on this projected $46 billion top-line windfall? Don't bet the house on folks paying for mobile content from within your app, and if you have a beef with that, take it up with Google, ABI suggests.

In a press release about its findings, ABI says Google's relative foot-dragging on some mobile application revenue streams has seriously hampered the market. Google did not introduce the "in-app purchase" concept to its Android marketplace until mid-2011, and in some global markets pay-per-download and subscription payment is not supported to this day.

Most "in-app" revenue -- which ABI says will top pay-per-download numbers this year -- can be attributed to mobile gamers, who tend to be a little, shall we say, rabid in their spending habits. You can't count on outlier customers to drive a huge top-line explosion like ABI predicts, so pay-per-download, advertising, and subscription billing may well be the vanguard of that $46 billion growth.

As a developer, what is the most fertile revenue source to target? Innovation can strike in any form, but the Internet continues to be a place where consumers look for free content and functionality, and the way to cash out on that is advertising. The news of LinkedIn and Facebook jumping into the mobile advertising space pushed both Apple and category superpower Google to lower their mobile ad prices this week, according to a report at Financial Times. It's all jockeying to gain early share in what is expected to be a boom market. FT.com quotes mobile agency executive Alexandre Mars as saying:

"The big players are all eager to grab this mobile business. They are playing chess."

Even if ABI's aggressive predictions don't fully materialize, there's little doubt that mobile is where the development action is for the foreseeable future. As we reported last week, TechNet recently issued a report on the "app economy" that suggested mobile development has already contributed about a half-million jobs to the U.S. economy alone, and that's just for starters.

Note: CNET News and TechRepublic are CBS Interactive sites.

About

Ken Hardin is a freelance writer and business analyst with more than two decades in technology media and product development. Before founding his own consultancy, Clarity Answers LLC, Ken was a member of the start-up team and an executive with TechRe...

2 comments
HypnoToad72
HypnoToad72

Let's see reality. So far, over the last decade or two, all the "projections" were met by paradigm changes to render the forecasts moot. And if the big players are playing chess, we pawns are useful for but one thing...

DWPNS
DWPNS

As a I.T. Services Provider and a last-mile rural ISP through WiMAX, what are some ideas of how my small company could monetize this industry.