Report: iPad will dominate tablet app downloads through 2017

by David Needle

November 19 2012

Paid apps are forecast to be a small percentage of all downloads by 2017.
Paid apps are forecast to be a small percentage of all downloads by 2017.

Like McDonald’s, Apple’s App Store keeps chugging along serving billions and billions, though downloads (over 25 billion to date) in the case of Apple, not burgers.

A new report says Apple is in prime position to keep its online marketplace lead when it comes to tablet app downloads for the five years.

Strategy Analytics says Apple’s release of the iPad Mini, it’s lowest cost tablet ($329) to date, will greatly expand the number of iOS devices out there and, in turn, generate even more app downloads.

The research firm notes App Stores are key for mobile device makers like Apple, Google and Microsoft.

Google’s Google Play store is actually set to overtake Apple when it comes to smartphone app downloads. Strategy Analytics say by 2017 Apple will have 56% of tablet app downloads, while Google Play will have over 45% of smartphone downloads (with iPhone downloads about half that percentage).

The research firm says download numbers for Windows RT tablets are small since the devices are just now hitting store shelves. But the percentage of app downloads via Windows 8 tablets (RT and Windows 8 combined) is expected to increase significantly in years to come.

Shrinking App Store revenue

The revenue generated by paid app downloads is huge, but the report says that growth will start to tail off over the next several years. Between 2008 and 2017 Strategy Analytics says paid downloads will generate more than $57B globally.

However, paid apps begin to decline as free apps are forecast to become over 91% of all downloads by 2017.

As the percentage of free app downloads grows, the average selling price of all downloaded apps (free and paid) will drop to just 8 cents for smartphone apps by 2017.

Such a decline in revenue and increase in app store maintenance costs – including app approval personnel, marketing, and other maintenance costs – may force app stores to consider new revenue streams or higher revenue splits.

"Paid downloads remain an essential component of the app ecosystem,” says Josh Martin, Director of Apps Research at Strategy Analytics. “Paid downloads will remain an important way for smaller developers to monetize their efforts.

“For developers committed to paid downloads transitioning to tablets may be the smartest way to preserve the business model over the long term.”

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