Mon, Feb 21, 2011 - Page 12 News List

Mobile application market to boom, iSuppli forecasts

‘FREEMIUM’:Many developers are offering apps for free and charging for premium features. Apple leads the market, with US$1.8 million in revenue, up 131.9%

By Jason Tan  /  Staff reporter

The global mobile applications market is set to continue its momentum, with total revenue expanding 81.5 percent this year to US$3.9 billion, a market research firm said.

“A key driver of growth is the ‘freemium’ business model, wherein a basic application is offered free of charge but fees are charged for premium features,” said IHS iSuppli in a report last week.

With hundreds of thousands of apps available from leading stores such as Apple Inc’s App Store, more developers are choosing to release their content for free, in the hope of monetizing their apps by offering additional content or functions via in-app purchases and advertising, according to the US researcher.

Global revenue for the mobile app market last year totaled US$2.2 billion, up 160.2 percent from US$828 million in 2009.

Apple maintained its dominance in the market, while Google Inc’s Android Market reported the most exponential growth, iSuppli said.

App Store generated US$1.8 billion in revenue last year, up 131.9 percent year-on-year.

It seized a 82.7 percent share of the market, down from 92.8 percent in 2009, the researcher said, adding that this was because competitors managed to close the gap with Apple’s iPhone in terms of providing smartphone products with compelling user interfaces.

“As competitors refine their stores, they will continue to eat into Apple’s dominant share. However, Apple is expected to retain more than half of market revenue at least through 2014,” the report said.

The Android Market saw last year’s revenue soar 861.5 percent, allowing it to take a 4.7 percent share of global mobile app revenue, up from 1.3 percent a year ago.

Nokia’s OVI Store posted the second-strongest growth with revenue rising 719.4 percent. It commanded a 4.9 percent share of the app market business, up from 1.5 percent in 2009, according to the report.

Research In Motion’s BlackBerry App World retained its No. 2 rank with a 360.3 percent growth. The company’s share of the market increased to 7.7 percent from 4.3 percent, iSuppli said.

While Taoyuan-based HTC Corp (宏達電), the world’s No. 5 smartphone brand, has made no announcement about setting up its own app store, it is devising a slew of mobile applications to increase the appeal of its first tablet PC — the HTC Flyer.

HTC’s £30 million (US$48 million) acquisition of Saffron Media Group Ltd, which develops software to deliver content over the Internet, and its US$40 million investment in games-on-demand provider OnLive Inc may help HTC lure users to its tablets and smartphones offerings.

Announced last week in Spain, the Flyer includes support for taking notes onscreen with a stylus, as well as play-back audio recordings from the time a note is written. Shipments will start in the second quarter, HTC said.

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