Research firm IDC released a forecast today predicting revenue from mobile apps will hit $35 billion in 2014, driven by the exploding number of downloads -- from almost 11 billion this year to nearly 77 billion worldwide in 2014.
IDC didn't release the full study and the release didn't break out the $35 billion figure by direct sales versus third-party advertising. But presumably the bulk of that amount will come from m-commerce rather than in-app advertising. Prices for paid apps are going up generally, and tablet devices will allow developers to charge more for titles.
A report from Distimo in November showed the average price of an iPhone app from April to October went up about 2%, to $4.03 -- while the average price for an iPad app increased 14.5%, to $4.97. So with the growing number of apps and rising prices, it appears there's still plenty of opportunity for brands to build their own apps in hope of hitting the big time.
At the same time, it's hard to think of any breakout branded apps in 2010 on par with titles like Kraft's iFood Assistant or the Zippo Lighter app. Asked about top branded apps released this year, Brad Spirrison, managing editor of app guide site Appolicious, points to the updated Chase Mobile app that lets customers deposit checks and make person-to-person transfers via their iPhone.
Among others he mentions are the Macy's iShop and Pepsi Refresh Everything apps. But none of those grabbed the mindshare that the Kraft and Zippo apps did in 2008 and 2009. Is it simply getting harder to break through the clutter with so many more apps -- 400,000 on the iPhone and Android devices alone -- now available? Well, yes. There's also the fact that in-app advertising has become a more viable alternative to creating an app in the last couple of years.
"There's a lot more noise in the space because the app world has grown in every direction," says Dave Rosner, who leads the innovation practice at Initiative. "There has to be a reason for creating an app now. When the App Store wasn't that crowded, just having an app was reason enough."
He adds that the agency is seeing a lot more clients turn to in-app advertising as a way to tap into the growing reach of apps without having to build their own. "Apps have come into their own as a media platform," he says. That's due in part to the emergence of Apple's iAd platform for advertising in apps and competing platforms from companies like Greystripe, Medialets and Crisp Wireless.
"It's much easier for brands to buy richer, more integrated media now than in the earlier days of the app ecosystem, when building an app was one of the only ways of reaching consumers," notes Medialets CEO Eric Litman. In other words, why risk investing in creating and promoting your own app when you can piggyback on a bonafide hit like "Angry Birds," or target a specific audience on apps?
The ad tools from these vendors also typically promise to deliver an app-like experience within ads, combining the best of both worlds.
Rosner also pointed out that the rise of location-based services like Foursquare and Gowalla has created another alternative to creating a standalone app. In that vein, Initiative this year developed an integrated campaign on Foursquare for the film "The Expendables" that offered tough-guy-themed tips and discounts in various cities to appeal to the core young male audience for action flicks.
That isn't to say brands won't continue to create their own apps, or update existing ones, but making an impact in an ever-widening ocean of apps won't get any easier.