App revenue set to double over next four years

The app market will see more growth over the next four years than it has since its inception eight years ago, according to new research from independent analyst, Ovum.

More than three times as much revenue is expected to be made between 2016 and 2020 than was generated between 2008 and 2015. However,  saturation and increasing acquisition costs in mature markets will lead to a noticeable deceleration in download volumes through 2020.

In summary:

• App revenue is expected to increase by more than 50% over the next four years. Revenue will increase at a rate 2.2 times faster than last year. The market is expected to grow to more than £55 billion by 2020, up from £25 billion in 2015.
• Download volumes will also increase, but at a slower pace. Global volumes will grow 1.8 times over the same period, reaching 378 billion downloads by 2020, up from 211 billion in 2015.
• Emerging markets will play a key role over the forecast period, driving the sharpest growth rate over the next five years in terms of both  downloads and revenue. In particular, as technology catches up to developed countries, they will register a much greater growth rate in terms of revenue per download. Nevertheless, mature markets will continue to capture the greatest share of app revenue through the forecast period.

App revenue will become increasingly important as hardware sales struggle in the coming years. The global smartphone market is expected to slow considerably over the next few years. Despite a record-setting holiday quarter, 2015 was likely the last year of double-digit growth for smartphone shipments.

Further findings highlighted in the report include:

• The global smartphone market is growing at a steady pace due to more widespread adoption in emerging markets. It is estimated that the global market will hit 2.1 billion units shipped by 2021.
• The platform war is over, even as adoption continues to rise across various markets across the globe. Android and iOS are estimated to account for 97.3% of the total market share in 2017.

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