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BizReport : Mobile Marketing : January 15, 2014

Mobile app development not a route to riches

A new study from Gartner reveals that the vast majority of mobile apps are developed for brand-building and awareness purposes which is just as well because very few will generate revenue for their developers.

by Helen Leggatt

Gartner's 2013 Mobility Predictions Special Report finds that fewer than 1 in 10,000 (0.01%) mobile apps will be a financial success for their developers through to 2018.

"The vast number of mobile apps may imply that mobile is a new revenue stream that will bring riches to many," says Ken Dulaney, vice president and analyst at Gartner. "However, our analysis shows that most mobile applications are not generating profits."

Dulaney goes on to describe the mobile app market as "hyperactive" saying the increased volume of high-quality free apps has changed along with increased consumer expectations for paid apps. Of all paid apps, 90% are downloaded less than 500 times per day and make less than $1,250 per day and, says the report, this situation will only get worse as competition increases.

However, many big brands do not expect to generate revenue from their apps and instead use them for brand marketing or just for fun.

Mobile ad platform Flurry recently released data showing the incredible rise of mobile app use across all categories. Overall mobile app use rose 115% in 2013 over the previous year. The category that showed the most growth was Messaging (photos and social) rising 203% year-on-year.

According to Simon Khalaf, president and CEO at Flurry, the growth of Messaging apps should not come as a surprise given press attention to apps such as Facebook and SnapChat.

"What is surprising, however, is that the rate of growth (tripling usage year-over-year) dramatically outpaced other popular categories," writes Khalaf on the Flurry blog. "This type of growth could explain the high valuation Facebook has allegedly put on SnapChat, or Facebook's rush to add direct messaging in Instagram, an app frequented by teens."

Image via Shutterstock

Tags: app forecast, brand marketing, mobile apps, mobile marketing, mobile messaging

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