In-Stat: App-Friendly Phones To Grow Fivefold By 2013

iphone appTechnology research firm In-Stat projects the number of mobile application-compatible devices will grow to about 140 million by 2013, creating a vast new market for advertisers.

Mobile app-centric smartphones -- led by the iPhone, and those powered by Palm and Android mobile operating systems -- will reach more than 30% of the global smartphone market. With the handset user base expanding and users downloading more mobile apps, In-Stat advises advertisers to start experimenting with the format.

"This is the time to get it in there and try stuff out and find out what works and what doesn't to learn lessons today that will be useful in three, four or five years when this market really starts to take off," said David Chamberlain, an In-Stat analyst.

The epicenter of the burgeoning app business, of course, has been Apple's App Store, where more than 850,000 programs have been downloaded since it opened last summer. Apple's success has spurred competitors including Google, Palm, Microsoft and Research in Motion to introduce their own app stores, expanding the overall market.

In a post on its company blog Tuesday, mobile ad network AdMob predicts that with the growth of the iPhone and iPod Touch, the App Store will soon be the single biggest distributor of mobile content. Between the two devices, AdMob estimates Apple has 15 million U.S. mobile Web and application users in the U.S.

Add in app stores such as Google's Android Market and RIM's forthcoming BlackBerry App World, and the wireless operators' walled gardens won't look so formidable. "In just a couple short months, application stores may turn the tables on the long held operator deck distribution channel as the leading way to get mobile content," according to the AdMob blog.

AdMob on Monday released its quarterly mobile metrics report, showing that the iPhone alone accounts for one-third of mobile ad impressions worldwide, and half in the U.S.

Chamberlain agreed that the emerging app stores represent a potential threat to carrier decks. But he suggested it may be just as well if they exit the content delivery business. "There may be a realization that they can probably leave application development to somebody else and focus on the access," he said.

As with other emerging formats, one of the hurdles for marketers advertising via branded apps is the lack of standard metrics to gauge campaign performance. Companies such as AdMob, Medialets and Zumobi are now trying to develop measurements around mobile apps to help the category gain greater legitimacy.

Depending on what advertisers want to track, Chamberlain pointed out that measurements can be customized within apps. "You can put some feedback tools right in the app to track things like how many minutes, how many times somebody used it, and whether they passed it on," he said. "That kind of information is available if marketers want to use it."

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