App revenue to double by 2020

Mobile app market is set to expand in the next five years and generate $79bn in revenue

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App revenue to double by 2020 Global mobile app revenue will grow by 2.2 times over the next five years, from $36bn in 2015 to $79bn in 2020 (Getty Images)
By  ITP.net Staff Writer Published  April 20, 2016

Analysts at Ovum have predicted that the mobile app market will further expand over the next five years than since its inception eight years ago.

According to Ovum, more than three times as much revenue will be generated between 2016 and 2020, compared to the revenue generated between 2008 and 2015, plus there will be 2.5 times as many downloads.

Global mobile app revenue will grow by 2.2 times over the next five years, from $36bn in 2015 to $79bn in 2020. This is compared to a 1.8 times increase in the number of app downloads - from 211bn in 2015 to 378bn in 2020.

Guillermo Escofet, principal analyst in Ovum's digital media team and author of the report "App Revenue to Double by 2020, Outpacing Download Growth" said: "Downloads will however see a marked slowdown in mature smartphone markets as they approach saturation and as user acquisition costs escalate, placing a greater emphasis on download quality rather than quantity."

He added: "Revenue, on the other hand, will continue on a higher growth trajectory as people spend more time on apps and as in-app spending intensifies."

Emerging markets will register the steepest growth rate over the next five years in both downloads and revenue - twice as steep as developed markets in the case of the latter. Yet developed markets will continue to capture the largest share of revenue.

Downloads, on the other hand, will continue to be dominated by emerging markets. Also, emerging markets' share of both downloads and revenue will increase.

Ovum's research sees China as the reason for emerging markets' dominance in downloads. The world's most populous country - and biggest smartphone market - accounts for the largest share by far of app installs throughout the forecast period from 2013 to 2020. It currently accounts for over half of installs.

According to Escofet, the bulk of this is driven by its huge Android independent app store sector. He concluded, "China will also end up as the top-grossing country, helped by its huge mobile gaming industry."

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