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Gartner Sees Just .01% of Consumer Apps Profitable by 2018

Gartner Sees Just .01% of Consumer Apps Profitable by 2018
January 13, 2014 10:31AM

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Industry research firm Gartner predicts that by 2018, under 0.01 percent of consumer apps will be financial successes for their creators, which means that the best developers may choose to look to other markets, such as specialty areas or the enterprise. The report also projects that 90 percent of paid apps will be downloaded fewer than 500 times daily.

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If you're a mobile app developer, forget about making much money from the consumer market. That's one of the predictions in a special report from industry research firm Gartner about mobile trends affecting IT departments as well as consumers.

The report, "Predicts 2014: Mobile and Wireless," said free apps were 91 percent of the market in 2012, but their share will reach nearly 95 percent by 2017. However, as the percentage of paid apps decreases, the number of paid downloads is expected to grow, increasing from 9.2 billion last year to 14.8 billion by 2017, while total downloads are projected to grow to 268 billion from 102 billion last year.

For developers, this means a smaller market slice of apps that consumers are willing to buy, and a more difficult time finding them.

Brand Recognition, Product Awareness

Gartner predicts that by 2018, under 0.01 percent of consumer apps will be financial successes for their creators, which means that the best developers may choose to look to other markets, such as specialty areas or the enterprise. Additionally, the report projects that 90 percent of paid apps will be downloaded fewer than 500 times daily, resulting in less than $1,250 per day in revenue.

Ken Dulaney, vice president and distinguished analyst at Gartner, said in a statement that the extremely small possibility of a successful financial return from the consumer market may mean that many developers will create consumer mobile apps "to build brand recognition and product awareness," or they may be developed "just for fun."

Al Hilwa, program director for Application Development Software Research at IDC, told us the consumer market showed the first bursts of developer energy "in the early days of smartphones," but "in the last few years a lot of mobile developers are taking the enterprise more seriously" because it is more readily "monetizable." He added that IT departments have already been dealing with free consumer apps that capture user information or offer intrusive advertising, so that continuing growth "is nothing new."

Too-Restrictive Mobile Device Management?

The Gartner report points out the obvious fact that, with so many consumer apps, buyers are making choices based on recommendation engines, friends, social networks and advertising instead of, say, browsing or sorting through the products. This poses problems for developers hoping to market a new product idea.

These trends in consumer apps will mean IT departments that are "bring your own device" friendly will face even more consumer apps that raise questions about security and compatibility. But consumers may grow increasingly protective of their apps. Gartner is predicting that 20 percent of BYOD programs "will fail due to enterprise deployment of mobile device management (MDM) measures that are too restrictive," as employees demand solutions that do not touch their personal content or apps.

Another trend that will continue, according to the Gartner report: the browser will become more of a "sophisticated delivery platform" as HTML5-based apps proliferate. But, again, this could pose challenges for IT departments if those apps are used for business purposes and need support, since browser-based apps will likely face challenges relating to performance and quality.

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