Growth in Mobile Apps (2008-2010) vs Web Sites (1994-1996)
As you can see the growth in the number mobile apps over the past 2 years is tracking very closely to the growth in the number of web sites at a similar stage in the development of the world-wide web.
What makes this trend interesting is the difference in the value of the two economies. For example Getjar’s recent report on Sizing up the Global App Market places the 2009 Global Mobile App economy at $4.1 Billion. This makes it almost 100 times larger than the web economy circa 1995.
Even the estimated $1.4 Billion economy of Apple’s App Store is proving significantly stronger and more robust than the early days of the web (Back in 1995 online advertising was worth $55 Million globally and Amazon’s eRetailing revenues were just over $0.5 Million). This is because the number of subscribers to the iPhone platform is growing at a faster rate than the number of internet subscribers during the 1994-1996 period.
iPhone Subscribers (2008-2010) vs Internet Subscribers (!994-1996)
The data provided in GigaOm’s The Apple App Store Economy infographic from December 2009 suggests the Average Revenue Per App Per Month (ARPAPM) in the store was $1865 before we extract Apple’s 30% margin. If you recalculate this figure by the number of developers then the ARPDPM before taking away Apple’s margin was $8929.
These figures round-up to $22,380 and $107,143 per annum. Compare this with the $2750 Average Revenue Per Web Site from online advertising we established a few weeks back as the 1995 benchmark and we soon discover the economics of the Mobile App Stores look considerably healthier than those figures that fueled the original dot-com boom.
However if we apply the analysis undertaken by Tomi T Ahonen in June of this year we soon discover a very different story (See Finally revealed. The easiest way to make money as an iPhone Developer). Tomi runs through a number of scenarios. For example, Apple’s earlier announcement of 1.43 Billion dollars generated over 2 years divided among 164,000 actual paid apps in the store in June gives the average app $8,700 in revenues. However his take away message from all this analysis is that half of all developers will earn less than $682 per year.
With so many free apps on offer it was self-evident from very early on in the Mobile Apps Boom that the App Store would suffer from the economics of the long tail as the web.
- The iPhone’s Long Tail
When I prepared this chart there was only 40,000 apps in the store but it was immediately apparent that only the Top 100 apps were really delivering any kind of return on investment on any given day. So success in the app store, as always in the media industry, depends on how long you can stay on top of the charts. And generally this success can be measured in weeks… if not days.
This of course is fundamentally different to the web economy where the Top 100 web sites tend to dominate the charts for years… if not decades (Think: NY Times, Yahoo!, MSN, AOL, Amazon and eBay).
MobCon Theory suggests the long-term trend for the Mobile App Boom will be towards delivering mobile subscribers free apps and free content. The fact that this time last year 3 out of 4 downloads from the Apple App Store were free suggests the theory is on track at this stage.
Sources
Posted on November 29, 2010
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