Report: Apple to Capture 76% of 2011 Mobile App Revenue

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Apple will capture 76% of all mobile app revenues in 2011, according to a new report from IHS iSuppli. The research firm is projecting Apple’s App Store revenues for iPhone, iPod touch, and iPad apps to balloon to US$2.91 billion in calendar 2011, up 63.4% from the $1.78 billion reported for 2010. All told, IHS iSuppli projects total mobile app sales of $3.8 billion, “with the Apple App Store projected to eat up a gargantuan three-quarters share of the total market.”

The company is looking at four major online app markets for its figures, including Apple’s App Store, Google’s Android Marketplace, Nokia’s Ovi Store, and Research In Motion’s BlackBerry App World.

If mobile apps sales hit the $3.8 billion level, it would represent a 77.7% increase from the year before, when total revenues were $2.1 billion. Total revenues for 2009 were just $830.6 million, with 2008 being the first year iSuppli tracked this data. The App Store was effectively the only game in town in 2008, with some $206 million in revenue.

iSuppli Chart

Source: IHS Screen Digest Research, May 2011

As you can see in the chart above, IHS iSuppli is projecting that mobile apps will continue to grow at a brisk clip. The firm said it expects $5.6 billion in revenue in 2012, $6.9 billion in 2013, and $8.3 billion in 2014. The company said that other online stores could come in and affect the market in future years, including a viable presence by Microsoft if its Windows Phone 7 platform finds traction.

Driving that growth will be Apple’s App Store, according to the report. “Given that Apple devices such as the iPhone, iPod and iPad are the market leaders in their field,” iSuppli wrote, “the company’s App Store is expected to take in 76 percent of revenue this year and retain 60 percent market share by 2014, despite efforts by the other stores to match Apple’s ability to monetize its users.”

The firm added, “Apple also will lead the way with revenue gained from in-app purchases—or additional purchases made within a paid application, such as bonus game levels—which will serve as a key growth driver for revenue up to 2014.”

Google will also put in nice effort for second place. iSuppli said that Google’s Android Marketplace sales should rise 295.4% to hit the $425 million market in 2011. Coming in third will be RIM’s BlackBerry App World with $279 million. Nokia’s Ovi Store will see $201 million in revenue.

“Both the RIM and Nokia app stores will continue over the next few years to be relegated to the two lower positions as Apple and Google remain the dominant players,” the company wrote.

All these dollars mean huge app download numbers, too, especially with the vast majority of downloads continuing to be free and ad-supported apps. iSuppli projects that total app downloads will almost double (growing faster than revenues) to 18.1 billion, compared to 9.5 billion in 2010.

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The maths don’t add up, even without doing a back-of-the-envelope calculation; simply projecting low-estimate year-on-year smartphone growth (ignore tablets for the moment), Android marketshare approaching 50% by 2014 (okay 2015), MS/Nokia at number 2 with about 20%, RIM and Apple in the teens, doesn’t give Apple 76% of the app revenue share unless competing stores are selling zip. Even with RIM out of the picture, that 24% app revenue gets split between holders of 70+% of the market.

Not sustainable, unless background assumptions are incorrect.

It begs the question, what keeps the Android and MS/Nokia teams in the game? If they are not selling apps, developers will stop writing for them. Without apps, what’s the appeal of their products? Cost alone? OS features (and few apps)? The OS creates the environment, but the apps define the user experience.

Either way, we need more robust models.


You are confusing phone/tablet device marketshare with phone/tablet app marketshare.

Android phones have more marketshare than iPhones, but currently Apple gets significantly more app revenue per device than Android. It also has much higher large tablet (iPad) and small tablet (iPod) marketshare, both of which consume apps.

So Android may eventually catch up in app revenue, but it will take some time.

I agree that MS and Nokia have a tough hill to climb given their smaller app stores.  But Android phones are doing well, which bodes well for their app revenue share in the future.

Bryan Chaffin

wab95, Apple’s always had a disproportionate percentage of the revenue of mobile app sales. In February, for instance, iSuppli showed Apple with 83% of mobile app revenues.

And Google has long acknowledged Android developers had a hard time selling apps—that a higher percentage of Android app downloads were free than on the App Store.

In other words, Google has had a hard time monetizing app sales, but then Google has always been focused on monetizing apps through ad revenues.

With that in mind, projecting 295.4% growth of Android app sales for 2011 would be a huge triumph for Android developers if it happens.

So to my mind, these numbers add up quite well. Apple owning 60% of revenues in 2014 with less than 20% smartphone market share would be fantastic for Apple and iOS developers.

As for what keeps the other guys going, there is still money to be made in these other markets. And there’s less competition for attention. And ad revenues for mobile apps on Android are solid. (etc.)

After all, look at all the great developers who made Mac apps when Apple’s PC market share was far smaller than it is today, when the company sold a few hundred thousand Macs each quarter instead of more than 3 million.

Also, if there are more than 100,000 app on Android today with such low sales, I think it easy to assume there will be plenty of apps once sales of Android devices exceed 100 million per quarter. That iOS device users buy more apps per user still leaves plenty of Fandroids to buy enough apps to make it worth developing more apps.

At the end of the day, these are only projections, and when even the smartest person on the planet makes projections, there are certain assumptions that go into those projections.  These numbers from iSuppli are as reasonable as any projections I’ve seen.

Bryan Chaffin

@Bryan, You are confusing phone/tablet device marketshare with phone/tablet app marketshare.

I am guessing you didn’t mean to aim that at me, but just in case: I am definitely not confusing the two. smile



I actually agree with the projections for revenue, for which there is empirical evidence. Rather my objection is the disproportionately small market share assigned to Apple while achieving such revenue share. It is difficult to see how that would occur without positively affecting both Apple’s market share and developer support, both at cost to the competition, as the smart phone market will be more mature (stable) by 2014. But this reasoning is for current high income markets.

On re-reading, I could buy these as global figures, as I don’t think the global Android market will be particularly lucrative in low income countries.

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