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The 102 Billion Download App Economy — Apple and Google Consolidate Rule

Douglas A. McIntyre

If the app is the new door for searching the Internet, or the portal to allowing people to have their own online DNA, the opening is widening at a frightening pace. According to Gartner, annual global app downloads will reach 102 billion this year. What no one knows. however, is how many apps actually get used.

In the rapidly expanding word of app use, there is Apple Inc. (AAPL), Google Inc. (GOOG) and then everyone else. That has been the case since Android apps joined those from Apple and surged forward with the adoption of Google's OS. Many analysts claim that Apple users use more apps, and perhaps pay for more, too. But Android penetration of smartphones and tablets has become so significant that Apple's lead may not mean much for very long.

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Leaving aside whether Apple or Google is in the better place, the real wonder is how frequently a typical smartphone owner can use a dozen or two dozen or three dozen apps. Gartner hints at the answer:

Sandy Shen, research director at Gartner [said,] "The average downloads per device should be high in early years as users get new devices and discover the apps they like. Over time they accumulate a portfolio of apps they like and stick to, so there will be moderate numbers of downloads in the later years."

In the process of experimentation, certainly many apps fail people's personal tests for whether they are useful, and some remain like dead wood on their devices.

The analysis of which apps people download versus which they use is complicated by a division between free and paid apps. As should be expected, free app downloads are in the great majority:

Total revenue in 2013 will reach $26 billion, up from $18 billion in 2012. Free apps will account for 91 percent of total downloads in 2013.

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While there is no proof of it, at least from Gartner, people would seem more likely to use what they pay for.

As the app has moved to the center of the smartphone and tablet software "ecosystem," as it is known, the only thing that analysts can be sure of is that the novelty of app experimentation eventually will wear off. Like so many drawers of clothing, or libraries of books, at some point people run out of space -- physical, mental or otherwise. Gartner reports as much:

[W]e expect average monthly downloads per iOS device to decline from 4.9 in 2013 to 3.9 in 2017, while average monthly downloads per Android device will decline from 6.2 in 2013 to 5.8 in 2017. This relates back to the overall trend of users using the same apps more often rather than downloading new ones.

At some point, and perhaps it has been passed already, the business of building new apps hardly will be worth being in at all.

Mobile App Store Downloads, Worldwide, 2010-2016 (Millions of Downloads)

2012

2013

2014

2014

2016

2017

Free Downloads

57,331

82,876

127,704

167,054

211,313

253,914

Paid-for Downloads

6,654

9,186

11,105

12,574

13,488

14,778

Total Downloads

63,985

102,062

138,809

179,628

224,801

268,692

Free Downloads %

89.6

91.0

92.0

93.0

94.0

94.5

Source: Gartner (September 2013)

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