Apple Dominates Global Mobile App Store Sales in 2010

Apple Computer Inc. warded off competition in the mobile application store market in 2010 to retain its global dominance, according to IHS Inc.'s Screen Digest, a U.K.-based researcher.

Apple's App Store generated some $1.8 billion in revenue in 2010 for nearly 83 percent of the worldwide market, down from about 93 percent share in 2009, the researcher said. The vendor's App Store revenue in 2010 amounts to a 132 percent jump over the $769 billion posted in 2009.

Screen Digest said that Apple's mobile application store sales benefited somewhat from its iPad tablet, whose users, while fewer in number compared to that of the iPhone, snap up applications that typically cost more than those for the iPhone, prompting a skewed impact on the vendor's revenue totals.

IHS said that by 2014, some 50 percent of Apple's App Store sales in the U.S. will be generated from iPad users, up from less than 20 percent in 2010.

The overall worldwide mobile application store market generated some $2.2 billion in 2010 for a 160 percent jump over the $828 million recorded in 2009. The researcher is forecasting that the segment will approach $4 billion worldwide in 2011. Games remain the primary application, accounting for more than half of all mobile application store revenue in 2010.

"In 2010, competitors managed to close the gap with Apple's iPhone in terms of providing smart phone products with compelling user interfaces," said Jack Kent, IHS analyst, mobile media.

"However, in terms of mobile application stores, Apple remains far ahead of the competition, with the other stores so far unable to replicate Apple's success in generating revenue from users," he said.

IHS said that Apple's competitors gained some ground in 2010, a trend line that, while likely to continue, is not expected to pare the vendor's market share below half of the segment's revenue by 2014.

Google Inc.'s Android Market shot up some 860 percent in 2010, climbing from slightly more than 1 percent of the market in 2009 to a 4.7 percent stake, the researcher said.

Nokia Corp.'s Ovi Store recorded revenue growth of nearly 720 percent in 2010 for a 4.9 percent share of the market while Research In Motion Inc.'s Blackberry App World commanded a 7.7 percent share of the segment, posting 360 percent growth over last year's totals.

Screen Digest said that so-called "freemiums," in which basic applications are sold free of charge but fees are charged for additional features, was a notable lever to the market last year.

 "As application stores become more and more crowded, with hundreds of thousands of apps available on the leading stores, developers increasingly are opting to release their content for free," said Kent. "They do this in the hope that they can monetize their apps by offering additional content or functionality via in-app purchases and advertising," he said.

The researcher estimates that "freemium" purchases will account for about 50 percent of all mobile application revenue in North America by 2014.

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