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Developer Economics: App market forecasts 2013-2016
The global app economy was worth $ 53Bn in 2012, and expected to rise to $ 143Bn in 2016. As part of our new Developer Economics: App Economy Forecasts 2013-2016 report, Senior Analyst, Andreas Pappas, examines developer population, platforms, revenues, and revenue models and shows how app store sales are just a small part of the app economy.
In the past few years the mobile industry has experienced a powerful upheaval sparked by the launch of the first iPhone and the creation of the first, true app ecosystem. This event brought about a gradual restructuring of the mobile value chain and a steady shift in value from the traditional pillars of the mobile economy, telco services and mobile handsets into app ecosystems. This emerging component of the value chain is what we call the “mobile app economy” and it represents the fastest growing area in the mobile value chain today and will continue to do so in the foreseeable future.
The value migration is profound as can be seen in the following graph. In 2012, the global app economy accounted for 18% of the combined app services & handset market. We estimate that by 2016 the contribution of the app market will rise to 33% of the combined market, equivalent to half of the handset market.
While several sources have estimated revenues generated via app-stores and advertising, these estimates are missing the largest part of the app economy. The contribution of app store sales to the total size of the app economy is less than 20%, while the combined app store sales and advertising market accounts for just over a quarter of revenues generated via apps.
VisionMobile has developed a model for sizing the direct app economy, that uses the large-scale, fine-grained dataset obtained via Developer Economics surveys. This model incorporates not just revenues generated directly through apps but economic activity generated via commissioned app development, mobile app e-commerce as an app monetisation model (i.e. not including e-commerce as core business), VC funding, services for app developers and several other income sources directly related to mobile apps.
The global app economy was worth $ 53Bn in 2012, and expected to rise to $ 68Bn in 2013. It is growing at a 28% CAGR between 2012 and 2016, reaching $143 Bn in 2016. The bulk of this growth will come from APAC and LatAm, the fastest growing markets in terms of smartphone penetration.
We estimate the global mobile developer population in 2013 will reach 2.3M individuals with each organisation that is directly involved in the app economy employing 4.5 developers on average, although this figure varies significantly by region. The mobile segment corresponds to 12.6% of the global developer population. In other words, 1 in 8 software developers is involved in mobile development in 2013.
VisionMobile’s App Economy Forecast 2013 – 2016 model combines results from our Q3 2013 Developer Economics survey (free download) and a large set of industry figures and indicators to deliver both bottom-up and top-down approaches in sizing the app economy. The VisionMobile App Economy Forecasts 2013-2016 report report provides a unique set of data points on the current state and growth of the app economy including:
- Forecasts (2013 – 2016) for revenues across regions (North America, Europe, Asia-Pacific, Latin America, Middle East & Africa)
- Forecasts (2013 – 2016) for revenues across platforms (Android, iOS, HTML5, Windows Phone)
- Forecasts (2013 – 2016) for revenues across revenue sources (App stores, In-app advertising, mobile e-Commerce, outsourced development, other)
- Forecasts (2013 – 2016) for the Mobile Developer population globally
- Mobile developer population by region, platform and revenue source for 2013
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