Free Apps Dominate Market with 89% Share of Mobile Downloads

In the advertising world, the word “free” may be losing its magic, but free apps are alive and well. According to a report from Gartner, an IT research and advisory firm, in 2012, 89% or 45.62 billion app downloads from app stores will be that of free apps. While 87.5% of downloads will be of paid apps that are $3 or less. In other words, the cheaper the app, the more likely it is to be downloaded, and “free” is the major trump card.

There was some other great information in the report, which was called “Market Trends: Mobile App Stores, Worldwide, 2012.” Numbers from 2011, which were almost identical to projections for 2012, show that 24.94 billion apps were downloaded from app stores, with 88.4% or about 22 billion free apps, and 11.6% or around 2.9 billion paid apps.

App stores include the Apple App Store, Google Play, and others.

While the ratios are projected to be almost exactly the same for 2012, the apps market is projected to grow by 83% this year, with growth rates of 50% to 79% yearly through 2016. Because the ratio of free apps to paid apps is so high, there isn’t much room for growth, but the study projects steady growth through 2016 anyway.

Here are the projections:

Year       Total app downloads      % of free apps

2012       45.62 billion                        89

2013       81.42 billion                        90

2014       131.67 billion                      91

2015       205.38 billion                      92

2016       309.61 billion                      93

Also, the combination of free apps and paid apps under $3 are projected to increase 96% by 2016.

As expected, Apple, Google, and Microsoft are dominating app sales, with Apple having the largest market share.  According to Gartner’s research director, Brian Blau, the App Store comprises 25% of available apps in all stores.

So, what can we take from all of this information?  The most obvious conclusion here is that those who can monetise free apps through the Apple App Store will probably see the best ROI for their apps. This means that app developers who make free iPhone game apps and figure out ways to monetise them within the apps should do very well in the market.

As for business owners, you want your apps to be free anyway, because you want to make it easy for present and future customers to do business with you. Having your own app listed in the App Store will help your business.  We recommend that you develop apps across all platforms for your business, but get the iPhone app developed first.

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