Mobile Apps No Pot of Gold for Developers

Mobile developers hoping to cash in on a blockbuster app have bad news from researcher Gartner: More competition and higher demands from users will make it even more difficult for developers to make money from smartphone and tablet applications.

By Mikael RicknA$?s
Mon, January 13, 2014

IDG News Service (London Bureau) — Mobile developers hoping to cash in on a blockbuster app have bad news from researcher Gartner: More competition and higher demands from users will make it even more difficult for developers to make money from smartphone and tablet applications.

The Google Play app store and Apple's iTunes store both have over one million apps. That adds up to too many choices for users, and makes it harder for developers to get noticed or make money from their applications.

Today about 90 percent of paid applications are downloaded fewer than 500 times per day and make less than US$1,250 a day, according to Gartner. This is only going to get worse, thanks to greater competition. In addition, applications will have to become more sophisticated to keep up with user demands, so operations, development, testing, deployment and support will become more expensive, it said.

This means by 2018 only one in ten thousand consumer apps will be considered a financial success by their developers, according to the market research company.

Developers need to prepare for this scenario and should set realistic expectations. If the goal is to make money directly from the sale of the app, developers need to thoroughly assess the concept, the costs and the opportunity, because the likelihood of success is minute, Gartner said.

The share of free apps is also predicted to rise from 91 percent last year to 94.5 percent in 2017. In the same period, the total number of downloads is expected to grow from 102.1 billion to 268.7 billion.

The growing number of available applications is also changing the way users find apps. Consumers can't sort through these large numbers and instead depend on suggestions from recommendation engines, friends, social networking or advertising to discover mobile applications, according to Gartner.

Gartner does however believe that the number of paid downloads will continue to grow, even though they are a smaller percentage of the total, and will reach 14.8 billion by 2017, compared to 9.2 billion last year.

And there's always the possibility of the exception: a student in a basement developing a one-of-a-kind application that becomes wildly successful, Gartner said.

Send news tips and comments to mikael_ricknas@idg.com

Our Commenting Policies