Mobile apps on path to reach $70 billion in annual revenue by 2017

Mobile apps on path to reach $70 billion in annual revenue by 2017

PanARMENIAN.Net - 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, Venture Beat said.

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.

Meanwhile, mobile app investment is gathering steam. It has doubled across categories since the third quarter of 2013, with $10 billion invested in the last 12 months.

Mobile app mergers and acquisitions accounted for a record $35 billion in the last 12 months, not including Facebook’s $16 billion acquisition of WhatsApp. In the first quarter of 2014, mobile app M&A was $7 billion, or twice the number from a year ago. The acquisitions are split between strategies aimed at growth, consolidation, and defensive moves.

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.

The new development is the adoption of the “app-as-a-service” model, which is similar to the software-as-a-service model in other industries.

 Top stories
"We roughly know who they are. If we can take them out of the equation then the rest will fall down," Troels Oerting said.
Facebook, like Twitter and YouTube, is inaccessible in Iran on the grounds that the sites undermine Islamic values.
The firm said it brought the case in an effort to force the government to be more transparent about personal data requests.
The Google messenger is in early stages of development and is likely to be launched in 2015, sources aware of the plans said.
Partner news