The Applications Economy
The Global App Economy
The global app economy is estimated to be worth US$1.6 trillion. Growth is based on the near universal use of handheld devices, increasing wireless bandwidth, and the maturation of cloud-based technologies, mobile platforms and their associated apps.
The industry monetises across three main variables;
All Mobile App Stores
With revenue expected to increase from US$1.3 trillion in 2016 to US$6.3 trillion in 2021
The user base is forecasted to increase from 3.4 billion people in 2016 to 6.3 billion in 2021
Time spent on apps will grow from 1.6 trillion hours in 2016 to 3.5 trillion in 2021
Annual spend per user is expected to increase from US$379 – US$ 1,008 in 2021. Due to the transition from physical to mobile transactions
Well known, brands that operate in the mobile apps payments space include; PayPal, Apply Pay, Google Wallet, LevelUp, Square Cash, Venmo, Facebook Messenger, Android Pay and Transfer Wise.
The enterprise market for mobile applications is larger than the consumer applications market. It includes but is not limited to software applications for customer relationship management (CRM), Enterprise Resource Planning (ERP), Supply Chain Managment (SCM), Business Intelligence (BI), Business Process Management (BPM), Content Management Systems (CMS) and Web Conferencing applications.
Sales are forecasted to reach US$259.51bn in 2022. The positive spill-over effects of the app economy should not be underestimated. The US$8 trillion Internet of Things (IOT), would not exist without mobile applications.
In 2021 the number of global app users is likely to nearly double, to reach 6.3 billion. Consumers are expected to spend the majority of their time engaging with e-commerce applications.
The mobile applications market is segmented into;
* App Stores
* Alternative App Stores
* Contract App Development
* M-Commerce of non-digital goods (online to offline)
A Comparison of Apple Store and Google Play
App stores lowered the barriers to entry for software developers in that. The owners of app stores offer distribution, payment and security services. In exchange for a percentage of app sales and in app-purchases.
This enabled developers to concentrate on the development of their apps. However, because the two main operating systems for Apps, Apple iOS and Google Android, own 99% of the total market share for apps. Developers have limited options regarding where they can play.
In terms of the number of app developers at a country level the three biggest countries are the USA, China and the UK
Android owns the largest market share is dominant primarily in developing economies, with the exception of China. However, the platform generates less revenue than Apple. Android operates an open source operating system.
The apps that are available on the Google platform originate from Google Play and from third -party Android stores. Apple on the other hand operates a closed system, all apps originate from the Apple app store.
As of June 2016, sports mobile apps are the fastest growing apps in history. Healthcare app growth is being driven by millennial’s, other categories that make the top five include social media apps, shopping apps and gambling applications.
The European App Economy
In 2013 global app developer revenue comprised of Contracts valued at €27. 8 billion, Other €10.5 billion, App store sales worth €9.1 billion, In-app advertising €3.7 billion, and e-commerce sales estimated to be €1.0 billion.
The European app landscape is a vibrant sector, that generates a significant number of jobs. European developers achieved success in a wide range of app categories, which include but are not limited to; Music, Gaming, Health and Fitness, Education, Finance and Enterprise Productivity applications.
According to Gigacom Research, in 2013 the European App economy was worth €17.5 billion, it expanded to €68 billion in 2018.
The UK is the biggest, app market in Europe with an estimated value of £4 billion. This is forecasted to increase to £15 billion by 2020 and is expected to exceed £30 billion by 2025.