The “hyperactive” mobile applications market will see only 0.01 per cent of consumer apps achieve financial success by 2018, as most consumers use apps only for fun, according to a report by Gartner.
With the large number of mobile apps available on the market prompting expectations of apps becoming one of the most high-revenue sectors, Gartner said consumers’ recreational use of apps suggested there was no easy road to profit.
According to Gartner, by 2018 only 0.01 per cent of mobile app developers will consider their product a financial success.
“The vast number of mobile apps may imply that mobile is a new revenue stream that will bring riches to many,” said Ken Dulaney, vice president and analyst at Gartner.
“However, our analysis shows that most mobile applications are not generating profits and that many mobile apps are not designed to generate revenue, but rather are used to build brand recognition and product awareness or are just for fun. Application designers who do not recognize this may find profits elusive.”
The high quality of free to download apps is also impacting on the sector, the analysts said, as consumers are less ready to spend money on mobile apps, and this trend will only be exacerbated as the market picks up further pace.
“There are so many applications that are free and that will never directly generate revenue. Gartner is forecasting that, by 2017, 94.5 per cent of downloads will be for free apps,” said Dulaney.
“Furthermore, of paid applications, about 90 per cent are downloaded less than 500 times per day and make less than US$1,250 a day. This is only going to get worse in the future when there will be even greater competition, especially in successful markets.”
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