Developers have been struggling to make a profit, as many apps are offered for free.
New York, NY (PRWEB) January 27, 2014
The release of the Apple iPhone and the launch of Google's Android have jump-started a practically inexistent industry of smartphone app developers. The smartphone's instant popularity and high adoption rate stimulated developers to quickly introduce fans of this new device to its full capabilities and superior functionality, offering gaming, entertainment, productivity, lifestyle and social apps. The percentage of services conducted online, often on smartphones, has been increasing constantly, along with demand from e-commerce and online auctions. Over the five years to 2014, revenue is expected to increase at an estimated rate of 49.8% to $9.7 billion.
According to IBISWorld Industry Analyst Sarah Kahn, “With an increasing number of mobile internet connections and low barriers to entry, the number of developers has been growing rapidly, and the structure of the industry is not mature enough to accommodate them.” The industry quickly became oversaturated, with players competing to develop new apps and advertise them to an exigent mobile audience. Developers have also been struggling to make a profit, as an increasing number of apps are offered for free. Monetization has been migrating away from paid apps and advertisements to a freemium business model that offers a pricing strategy in which a mobile app is available for free, and advanced features and functionality are acquired as in-app purchases. This model is widely successful, and revenue is expected to enjoy a 27.8% boost in 2014 alone.
Over the next five years, developers will likely struggle to satisfy the digital consumer. Smartphone App Developers are expected to increasingly rely on the development of web apps that are run by a browser, typically written in HTML5 and function across multiple platforms; consequently, they will rely less on the development of native apps that are integrated with the device's respective operating system. Big data and predictive analytics are also expected to allow developers to create predictive apps. “With the increase in private information stored on smartphones, developers will likely struggle with mobile app security,” says Kahn. As developers attempt to differentiate apps in the oversaturated industry, opportunities for mobile app marketing are also on the horizon. Due to the decreasing average app price, Industry revenue is projected to climb at a slower annualized rate over the five years to 2019.
For more information, visit IBISWorld’s Smartphone App Developers in the US industry report page.
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IBISWorld industry Report Key Topics
The Smartphone App Developers in the US industry develops and publishes applications for smartphones and mobile devices. Apps are typically sold in a special "app store" that can be accessed through the device.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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