According to the report released by IDC, mobile device users across the globe installed nearly 156 billion mobile applications in 2015. This has generated $34.2 billion in direct (non-advertising) revenue. IDC forecasts these figures to grow to more than $210 billion installs and nearly $57 billion in direct revenue by 2020.
IDC also expects to see a slower growth in both application install volumes and direct revenue over time. The annual install growth could fall into single digits over the second half of the forecast, while mobile applications install volume will continue to experience a five year compound annual growth rate (CAGR) of 6.3%. On the other hand, direct revenue from mobile applications will also experience slower growth by the end of the forecast period, although the five year CAGR will remain in the double digits at 10.6%.
Apple’s App store captured nearly 58% global direct app revenue in 2015, an increase of 36% year over year, marking an increase of 36 percent year on year. On the contrary Apple’s share of global app installs fell by 8% to a low of 15 per cent year on year. A larger number of Android users ensure greater overall number of installs through Google Play, which captured about 60% of install volume and nearly 36% of direct revenue in 2015. Apple is expected to lead the pack in terms of revenue generation. However, both ecosystems are more than sufficiently established to sustainably attract developers.
Speaking on mobile ad spending John Jackson, Research Vice President, Mobile and Connected Platforms at IDC said, “Facebook and Google continue to dominate mobile ad spending thanks to the scale and sophistication of their network effects, with Facebook's moves to incorporate news and other interests into its experience will likely pull traffic and install volumes away from discreet apps. Similarly, the emergence of 'bots', which seek to automate interactions in a contextually infused way, are another in a series of examples of value being created above the OS layer and even above the app."