Yankee Group Doubles U.S. Mobile App Revenue Forecast

New Estimate Sees Mobile App Revenue Reaching $11 Billion in 2014

BOSTON -- Smartphone users are downloading increasing numbers of apps, and more of the apps they download come at a price. The result is a supercharged mobile app gold rush that’s shattering Yankee Group’s previous revenue estimates and reaching a whopping $11 billion by 2014.

“But strong results from T-Mobile suggest that Android will be the next breakout smartphone app platform.”

In the new report, “The Mobile App Gold Rush Speeds Up,” Yankee Group sees several factors—increased smartphone shipments, more app stores and more expensive apps—combining to nearly double forecasted mobile app revenue, from $537 million to $1.6 billion in 2010 alone.

While most app developers and store owners will garner a share of the riches, users of Apple’s iPhone and AT&T’s network download the most apps and generate the most revenue. “Apple’s innovative one-click technology and AT&T’s exclusive deal for the iPhone put them ahead for now,” says Carl Howe, director at Yankee Group and author of the report. “But strong results from T-Mobile suggest that Android will be the next breakout smartphone app platform.”

Key findings include:

* Paid apps are on the rise. Nearly a third of all apps downloaded today are purchased, compared with just 18 percent a year ago.
* Average price per app is up. The overall average paid app costs $2.85, up from $1.99 a year ago.
* AT&T and iPhone users download the most. Apple iPhone users download 60 apps per year, three times the average, while AT&T users download 27 apps annually, or 42 percent more than average.
* T-Mobile and Android are a close second. T-Mobile, the closest thing to an Android pure play, comes in second for all carriers, with its users downloading more than 18 apps per year on average.
* Verizon has the most paid apps. Two-thirds of apps downloaded by Verizon users are paid, the most of any carrier.

Source: Yankee Group