Mobile device users installed nearly 156 billion applications worldwide in 2015, but the growth of app installations and direct revenue from them will slow by the end of the decade, according to a new report.
International Data Corp. predicted installations will increase to more than 210 billion in 2020, generating nearly $57 billion in direct (non-advertising) revenue compared to $34.2 billion last year.
“While the market will continue to grow throughout the forecast period, IDC expects to see slower growth in both application install volumes and direct revenue over time,” the market researcher said in a news release.
The slowdown will largely be driven by market maturation, IDC said, with app install growth declining into the single digits over the second half of the forecast. Volume will still show a five-year compound annual growth rate of 6.3%.
Direct revenue from mobile apps is also expected to experience slower growth by the end of the forecast period, although the five-year CAGR will remain in the double digits at 10.6%.
“While they provide a convenient measure of the mobile app economy and its beneficiaries, we caution that preoccupation with download/install volumes and associated direct revenue may miss the thrust of changes in the mobile marketplace,” John Jackson, an IDC vice president, 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,” he added.
According to IDC, Apple’s App Store “ecosystem” captured nearly 58% of global direct app revenue in 2015, an increase of 36% year over year, but its share of install volume was only 15%, down nearly 8%.
“The sheer volume of Android-based devices in use ensures a greater overall number of installs through Google Play, which captured about 60% of install volume and nearly 36% of direct revenue in 2015,” IDC said, adding that Apple is expected to continue outperforming Google Play in terms of revenue generation.