• by Aaron Baar , February 26, 2009

Consumers love adding applications to their new smartphones, and they are willing to pay for it. According to ABI Research, nearly 17% of users who installed new applications are spending upwards of $100 adding them--from games to even more specialized business programs--to their devices. 

"Compared with the cost of most of these devices, it's the first time we've seen applications exceed the cost of the phones," Jeff Orr, ABI's senior analyst for mobile content, tells Marketing Daily. The level of spending is even more considerable when taking into account that many of the applications come at a low cost--as low as 99 cents apiece in Apple's iPhone App Store, Orr says.

Orr attributes the increase to Apple's heavy promotion of the applications available for its platform. "There's definitely a halo effect," Orr says. "Most mobile phone users didn't know they could add applications to any of their phones until the iPhone started promoting it."

And more stores are on their way for different platforms, Orr says. In 2009, companies such as Nokia, RIM, Palm and Samsung plan to launch new mobile application storefronts to keep up with the growing sales of smartphones, he says.

"The percentage of people using smartphones is growing categorically," Orr says. "For applications, we also expect [the segment] will grow. The question is, will the economy have an impact?"

If the current market is any indication, that's unlikely. In a recent study, comScore found that the number of people downloading games--the most popular segment of downloads--grew 17% between November 2007 and November 2008. The number of actual games downloaded increased 34% in that same time period. A comScore analyst said that number was only likely to increase as more smartphones hit the market, including a new entry from Palm coming in March.