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Microsoft Cloud Authors: Liz McMillan, Elizabeth White, Mihai Corbuleac, Pat Romanski, David Bermingham

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Strategy Analytics: Apple and Google continue to dominate the app market maintaining more than 75 percent revenue share in 2017

As Windows 8 launches, the iPhone 5 and iPad Mini continue to see long ordering delays, Android exceeds 1M activations a day and RIM prepares BlackBerry 10 for early 2013, the app market is poised for continued growth.

The Strategy Analytics App Ecosystem Opportunities (AEO) forecast - Mobile Apps Revenue Forecast: 2008 – 2017 – predicts by 2017 the mobile app smartphone market will generate more than $35B growing from less than $1B in 2009. The app market will be driven by more targeted advertising, growing consumer interest in virtual goods and the adoption of subscription business models.

So popular are alternative business models that while paid downloads accounted for nearly 70 percent of revenue in 2009 the business model will account for less than 36 percent of total revenue in 2017. Advertising will grow to generate the most revenue by 2013 as companies invest more in in-app advertising, improved targeting helps maintain CPMs, and more developers rely on advertising to drive revenue.

According to Josh Martin, Director of Apps Research, “The battle for developers is on and supporting recurring revenue streams is essential to gaining developer support. It is for this reason that Microsoft and Research in Motion are ensuring their new platforms support in-app purchase and subscription in addition to paid downloads and advertising at launch. They continue to battle for third place as the forecast shows Apple’s and Google’s app stores dominating revenue generation for developers throughout the forecast period."

About Strategy Analytics

Strategy Analytics, Inc. provides the competitive edge with advisory services, consulting and actionable market intelligence for emerging technology, mobile and wireless, digital consumer and automotive electronics companies. With offices in North America, Europe and Asia, Strategy Analytics delivers insights for enterprise success. www.StrategyAnalytics.com

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