Between 2010 and 2011 the global installed base of app consumers increased by 104%. While the installed base of smartphones increased by nearly 274 million, tablets were the fastest growing segment.

The number of new tablet app consumers increased by 58 million. As a result, tablet owners now constitute 8.6% of the installed app consumer base.

Global installed app user base +58 million in 2011

Based on Q2 projections for tablet shipments in 2012, the installed base of tablet users is set to increase more than 150% by 2013.  As tablet users become a larger and larger app downloading segment, their app behavior and preferences will have an increasing influence on the app market – illustrated already in the growth in the number of apps and stores devoted to them.

Installed base of tablet users to increase more than 150% by 2013

During 2011, apps in the Apple App Store for iPad grew 180% to more than 140,000 apps by the end of Q4 2011. While this cannot be easily quantified for Android as tablet apps are not separated out, the growth of niche stores and niche store categories focusing on Android tablets reflects their growing presence. For example, Archos Appslib focuses completely on Android tablet apps, while other stores like Android Tapp has a dedicated category.

Several studies have shown that tablet users exhibit different behaviour towards app downloading/usage and mobile browsing than smartphone users.  Based on the breadth of use cases for gaming, ecommerce, digital publishing and the enterprise – tablet user growth is likely to have a marked effect on consumption in these areas.

Tablet apps for the enterprise market

In the enterprise, for example, tablets have already been largely implemented at upper levels of management and are quickly working their way throughout organizations – according to Apple’s CEO Tim Cook in 2012, 92% of Fortune 500 companies are testing or deploying iPads. As more and more use cases are developed and penetration increases, so too will the number of apps being developed for enterprise tablet users. While Apple has already carved out a niche section for iPad and iPhone Business users called “@Work”, other players like Lenovo and Cisco are trying to do the same for Android Business users.

What do you think – how will the growth in the installed base of tablet users impact the mobile apps market? Which app categories do you think will be most impacted?

To find out more about the growth in the market for mobile apps check out the latest Smartphone App Market Monitor –Vol. 5 Q4 2011 with a special comparison of mobile and app market growth between 2010 and 2011. The report comes in different versions: As a PDF Report, as a set of PPT Slides, as a Bundle (PDF & PPT) package, or as a One-year subscription.

Please also have a look at our single PPT slides, starting at 9€:

- Number of Applications Published in Market Places

- Smartphone Application Market Size

- Number of applications per mobile platform

- Growth of Total Application Downloads Number

- and many more.

Over the last 3 years most MNOs and OEMs were aiming to provide app stores with a full range of native apps – some players even ran more than one store at the same time. 2010 was a watershed year for app store openings, only a few of those new entrants, however, have since managed to attract enough developer attention. As a consequence, 2011 marked the beginning of a shake-out in the app store market. In order to be successful, new entrants will either have to concentrate on new technologies (Web apps) or target niche segments (e.g. business app stores).

See more insights in the new Smartphone App Market Monitor Vol.5.

The development of the app market (2000-2011) – four phases

In comparison to 2010, the app store market for full catalogue stores in 2011 largely settled, with only a few new entrants (excluding the market for niche stores). Some stores, which may have looked promising in 2010, succumbed to market pressures and closed, combined their offerings, or were slowly fizzling out at the close of 2011.

The Apple App Store and the Android Market (now Google Play), however, continued to gain momentum during 2011. They both added a significant amount of content and attracted increasing numbers of downloads – more than 1 billion per month each by Q4 2011.

Looking back at the development of the app store market since 2000, the last 12-14 months appears to be a phase of consolidation following three distinct phases of growth:

• Phase I: Pre-Apple App Store

Between 2000 and 2007, there were a handful of independent and MNO stores which offered content largely catering to feature phones: small games, wall paper, ring tones, etc. While these stores garnered attention and were successful in their own right, their offerings and design had little content focus and were limited by the devices being used.

• Phase II: Apple’s Launch (and other early movers)

After the release of the iPhone, Apple launched the game-changing Apple App Store with content to take advantage of smartphone capabilities. Google was close behind with the Android Marketplace as well as Palm, Verizon (MNO), and Pocketgear (Independent).

• Phase III: Proliferation

App store providers from all corners of the market – MNOs, OEMs, Independents – jumped on Apple’s initial success and brought out their own offerings.

• Phase IV: Consolidation

Since the latter half of 2010, the number of app store openings has dropped off significantly as all major providers had already launched their stores. At the same time, stores which failed to attract a significant level of apps within a reasonable period (a threshold of around 3,000 apps) began to close their web interfaces or close down altogether – e.g. Palm Software Store, Symbian Horizon, Pocketgear, O2 Litmus, Playnow Arena, Windows Store for Mobile, etc.

Looking ahead, 2012 will likely see more consolidation

• The app store “duopoly” is growing: The Apple App Store and Google Play (Android Marketplace) show no signs of slowing as the number of apps, users and download numbers continue to snowball.
• More stores will exit the market: Microsoft has already announced it will shut down the Windows Store for Mobile altogether in May to focus on the Windows Marketplace. Other stores – e.g. Mobihand – have appeared to be under financial duress and looking for new monetization strategies or to be acquired.

Is there still room for new entrants?

At this point, any new market entrant will need to provide something fundamentally different to what Apple and Google are offering, or invest a significant amount of money (e.g. Microsoft’s investment in the development of the Window’s Phone Marketplace).

One possibility for new entrants is to target niche segments of the market. Niche app stores blossomed in 2011, numbering near 100 by the end of the year. The focus of these stores range from OS-specific, to quality curation, to consumer groups like Enterprises.

Another possibility for entrants may be through web apps stores facilitated by the development of mobile browsers. As of late February, Mozilla opened its platform independent “Mozilla Marketplace” to developer submissions of HTML5 web apps. While this store will essentially compete with Google’s Chrome Web Store, it also complements Mozilla’s planned release of its own smartphone based on its “Boot to Gecko” (B2G) web engine. As the entire phone’s native device capabilities will be accessible using HTML5, web apps will not lack functionality.

At this point, the release of the Mozilla phone is planned for regions where existing smartphones are largely too expensive. However, depending on the capabilities and success of the phone as well as Mozilla’s ability to have B2G technologies standardized by the World Wide Web Consortium (the primary international standards organization for the world wide web), the “Mozilla Marketplace” (and possibly Google’s Chrome Web Store) could become a considerable force in the app store market.

What do you think: Where is the app market headed in 2012? Could plans by Mozilla and Google (In February Google released a beta version of Chrome for Android for mobile devices running Android 4.0 (Ice Cream Sandwich) eventually make web app stores viable competitors against native app stores?

To have a deeper look into the app market world, including metrics and analysis on full catalogue and niche app stores, please find our latest research report, “Smartphone App Market Monitor Vol.5”. The Smartphone App Market Monitor is available as a:

PDF Report (61 pages report including graphs and tables plus written explanation): The Smartphone App Market Monitor Vol.5 – PDF

PPT Slides Set (50 slides set containing the report’s graphs and tables for easy usage in your presentations): The Smartphone App Market Monitor Vol.5 – PPT

Bundle of PDF Report plus PPT Slide Set (both above products): The Smartphone App Market Monitor Vol.5 – PDF&PPT

One-year subscription (buy the first report immediately and get the following updates sent to your email address directly): The Smartphone App Market Monitor Vol.5 – 1-year subscription

2011 already showed significant growth for the mHealth app market. In 2012 the market size will nearly double.

The smartphone application market for mobile healthcare will reach US$ 1.3 billion in 2012 – up from US$ 718 million in 2011. Despite this substantial growth, the mHealth market is still in an embryonic state – especially in comparison to the US$ 6 trillion of the overall global healthcare market. Several factors (esp. smartphone penetration), will continue, however, to drive mHealth market growth over the next couple of years.

Global revenue for mHealth applications in 2012: US$ 1.3 billion

These findings are part of our new Mobile Health Market Report 2011-2016 report. Click here to preview the table of contents and sample pages.

Mobile healthcare market drivers

The increase of revenue stems from downloads, in-app advertisements, mHealth services, direct transactions and sensor sales. As a number of big healthcare companies published mHealth apps in 2011 that go far beyond a simple allergy tracker or pill reminder (e.g. Sanofi Aventis’ sensor-based iBGStar Diabetis monitoring app) sensors are a growing part of the landscape.

In 2012 the number of mHealth application users – mobile users who downloaded a smartphone mHealth application at least once – will reach 247 million. Compared to the 124 million users who downloaded mHealth smarthphone applications in 2011, this is a near doubling.

The technical aspects of the healthcare landscape are changing rapidly and fundamentally. Healthcare data, the number of healthcare apps and their usage on mobile phones is growing. It is all evolving around smartphones and sensors attached to the phone.

New mobile healthcare market research report

For more information on the mHealth application market read our report, Mobile Health Market Report 2011-2016. The report describes in a detailed 100 pages the impact of smartphone applications on the mHealth industry. It will help decision makers in the healthcare market to understand the current status of the market, learn about best practices and get insights on future trends and market potentials.

More mobile health reports:

- Mobile Health Applications Landscape: Best Practice Examples (2011 – 2016)

- mHealth App Market Trends and Figures 2011-2016

What is your take on the growing mHealth market?

2011 was the first year of substantial business in the market for mobile health services delivered via smartphone applications.

Since our first mHealth report was published last year, the growth in this market has greatly accelerated. The main drivers for this growth have been the increase in the smartphone user base on the demand side, and the doubling of the number of mHealth applications on the supply side.

Mobile healthcare market has grown a lot in the last year …

A majority of the major healthcare companies have discovered mHealth applications as an innovative way to promote and deliver healthcare services and products. A testament to this is that a number of these large players published mHealth apps in 2011 that go far beyond a simple allergy tracker or pill reminder, e.g. Sanofi Aventis’ sensor-based iBGStar Diabetis monitoring app.

As a consequence, the smartphone application based mHealth market increased by a factor of 7 to reach $US 718 million in 2011. These findings are part of our new Mobile Health Market Report 2011 – 2016.

… but the market has by far not yet reached its full potential

Nevertheless, the mHealth market is still in an embryonic state. Theoretically the market potential is enormous given the overall worldwide healthcare market size of US$ 6 trillion (WHO estimate) and the potential use cases and benefits for mobile patient healthcare support.

For more information on the mHealth application market read our report, “The Mobile Health Market Report 2011 – 2016.”

The report describes in a detailed 100 pages the impact of the smartphone applications on the mHealth industry. It will help decision makers in the healthcare market to understand the current status of the market, learn about best practices and get insights on future trends and market potentials.  Read more about the mobile healthcare market.

Please share your thoughts on how the mHealth market will develop.

The development service market today is almost 3 times of the size of the application download market.

The market for mobile application development services, including application creation, management, distribution and extension services, has reached $US 20.5 billion in 2011. App development services became a mass market that has surpassed the app content market by a factor of 3.

$US 6.8 bn in app download vs. $US 20.5 bn in app development

In 2011 publishers created $US 6.8 billion in application download revenues.

Today most app project revenue is generated from “classical” app creation services (concept creation, design and coding). New service types like app libraries, white label solutions and multi platform app development tools have become more and more popular, but do not yet take a major share of the market.

Daily rates for app development vary

Prices for application development services vary significantly between regions. UK developers charge $US 626 per day whereas competitors from India charge, on average, $US 138 per working day.

App development partners using price as the main criteria for selection will not be lead to an optimal solution as most of the price differences are offset by the additional time needed by offshore app developers.

The Market for Mobile Application Development Services

For more information on the app developer industry see our research report, “The Market for Mobile Application Development Services (2010-2015) – Selling The Spades To The App Gold Diggers”. This report covers the dynamic market on 98 pages. It is written for app developers as a planning and benchmarking tool as well as for app publishers who wants to develop their sourcing strategy.

Please meet us at the M-Days in Frankfurt (1^st and 2^nd of February 2012) to discuss developments in the app market. To see the program click here: M-Days Program (in German).

The market for app stores is shifting – as the market for general, first-tier app stores is solidifying, niche stores are increasing, offering customers and publishers new opportunities.

These findings are taken from the new market research report “Smartphone App Market Monitor Vol.4”.

Just like first-tier stores, niche stores have existed in the market since the early 2000s, but have only become relevant since the launch of the Apple App Store. As all the major OEMs and MNOs launched their app stores between 2008 and 2010, 2011 has become the year of targeting niche app user segments.

The number of new niche stores has doubled every year

As seen in the chart below, the number of new niche stores has doubled every year since 2009.

Broadly speaking, there are 3 types of niche stores:

• Platform-oriented: Provides apps for a special OS platform e.g. AndroidPIT, Crackberry.
• Target group-oriented: Provides apps for a specific segment of app users e.g. business or adults.
• Carve outs: Niche store with a full catalogue store e.g. MNOs having their own app store within the Android Market Place or “@work” by Apple.

The growth of niche app stores – particular target group-oriented stores – has been partially fueled by back-end service providers. These service providers enable white label app stores for any company which would like to run its own app store and monetize, for example, the website’s traffic.

Niche stores reflect a market change

The growth of niche app stores also reflects a shift in the market from a platform-driven service offering, to a more sophisticated customer segment-driven one. In the past, the priority for device owners was to look for stores which provided apps that were compatible to their handheld devices. As the number of apps has now dramatically expanded, customers face increasing difficulties in locating specific apps due to the volume of items within these stores. As a result, device owners are now looking for stores which provide them with more streamlined, targeted app selections and results.

The market’s demand for easier search and discoverability of apps will have an impact on both publishers and app stores.

• For a great majority of publishers, niche plays – whether that is a dedicated space in a large app store or a stand alone or aggregator store – present increased opportunities for exposure, hopefully leading to increased downloads.
• For app stores, the rise of niche alternatives indicates that search mechanisms and shelf space will need to increase in order to keep pace with the growth of apps.

What do you think: Are niche stores a normal development of a market which is dominated by a duopoly? Will they have a major impact on the market?

To have a deeper look into the app market world, including niche stores, please find our latest research report “Smartphone App Market Monitor Vol.4”.

To better understand the potential global app development service market please have a look at our “The Market for Mobile Application Development Services (2010-2015)”.

With 3.49 billion total downloads as of September 2011, the US is still the largest market, holding more than 50% of the total app download market share, but not the most active market and not the one with the highest potential.

Download our free Android Market Insights Vol. 7.

The United States remains one of the largest markets, both in terms of user base and, consequently in terms of volume of apps downloaded. Android smartphone users, based in the US, have generated over 50% of all Android app downloads, totaling nearly 3.5 billion.

South Korea, the second largest market in terms of app downloads, lags behind with a mere 9% share of the total Android app downloads from the Android Market; followed by United Kingdom, Germany and France.

US not the cash cow market for mobile applications

Yesterday’s news? So let’s have a look at something different: Obviously users based in the largest Android markets are not necessarily the most active app downloaders.  If we take a look at the average app downloads per smartphone user we see that the cash cow markets also are to be found elsewhere.

User download behavior differs significantly between markets. Sweden has a low level of Android smartphone penetration but user behavior reflects a high interest in apps. The Netherlands, Germany, Switzerland and Spain follow slightly behind. Comparatively, Russian, Japanese and Chinese subscribers are among the most passive downloaders.

The average user in major Android markets downloads 2-3 applications per month. Higher average downloads per smartphone user show the market’s rate of absorption and growth potential. In other words, higher numbers of per smartphone user app downloads demonstrates a society’s openness toward new apps. Thus, the growth rate of total app downloads in these countries is likely to increase with less marketing efforts, compared to countries with less active users.

Four types of environments for app market growth

Grouping the above countries along two dimensions: the number of downloads per smartphone user and the level of android smartphone penetration, four types of environments for app market growth emerge:

• Markets with a Relatively High Growth Potential – These markets have a relatively high number of downloads per smartphone user per month, but relatively low Android smartphone penetration overall.
• Cash Cow Markets – “Cash Cow Markets” exhibit relatively high Android smartphone penetration rates and relatively high numbers of app downloads per user per month.
• Very High Growth Potential/Resistant to Change – Based on different societal factors, including consumer behavior, countries in this category have either a very high growth potential or are resistant to change.
• Highly Saturated Markets – Markets with a very high Android smartphone penetration rate, but with a very low number of app downloads per user per month.

For more detailed information on the environment for app growth in different countries, download our free Android Market Insights Vol. 7.

For more information about the App Development market please review our report “The Market for Mobile Application Development Services (2010-2015)“

37% of published apps have been removed from the Android Market.

Download our free Android Market Insights Vol. 6.

Over the past few months, the Android Market has been maintaining an exponential growth, but is still lagging behind the app store market leader, Apple. In Q3 of 2011, the number of active mobile applications in the Android Market stood at 319,161 compared to 459,589 in Apple App store.

However if we look deeper, Android developers are significantly more productive than Apple’s. We’ve noticed that the average publisher on Android has placed more than 6 applications in the Market since launch, compared to just over 4 apps on average that have been published by iOS developers. (If you want to find out more about opportunities for professional mobile application developers, please have a look at our developer report – or at the report’s special chapter about Solutions for Developers and Publishers to Reduce Development Costs and Time to Market).

The actual total number of applications published on the Android Market leapt to over 500,000 in September 2011. In the meantime, the Apple App Store stands at just over 600,000 successful submissions: just 20% more. The issue is that over 37% of the applications published were later removed from the Android Market for various reasons, whereas the Apple App Store has removed just 24% of published apps in comparison, as of the end of September.

Although Apple is known to regularly clean up its store from inappropriate or outdated content, its active application share still exceeds that of Android. It is likely that the more rigid application submission requirements prevent developers from publishing multiple trial or low quality applications whereas publishers in the Android Market place a lot of market testing, trials, demo and malware content. Over 78% of the apps removed from the Android Market were free, which could mean that publishers put more effort into the applications they place with the pay-per-download business model, thus ensuring that it is kept longer in store.

At the other end, the share of deactivated apps in the WP7 Marketplace today stands at just 13%.  However, one has to bear in mind that it is a comparably young store and many publishers are still exploring its potential. Fifteen months after its launch (comparable to the WP7 store now), the Android Market similarly had 86% of its apps active and a significant application store clean-up didn’t get started until the end of 2010.

Please also check our research report The Market for Mobile Application Development Services (2010-2015).

Just by choosing the less competitive and more price-intensive category, developers can lift their potential revenue by 900% above average.

These finding are part of our latest free monthly “Android Market Insights”. Download it here.

At the end of August 2011 the average application had generated nearly $2,500 since it has been published. The total average cumulative revenue from paid downloads varied from $300 to $21,000 per category.

Although nearly a quarter of all apps downloaded on Android Market are games, the monetization potential of these apps is rather mediocre. Intense competition significantly reduces the potential revenue. Unsurprisingly, the smallest category of Weather apps has generated by far the highest average revenue per app in the store.

However the use-case of the app is very specific and it is very difficult for developers to make yet-another great weather app. Therefore the Business category could be an optimal choice for developers. It currently contains 7,000 apps and only 13% of them are paid; while users do not mind paying a price for another good tool.

Many categories though have very low average revenue, because users either prefer to download free alternatives, or they just would not pay more than a dollar for another ringtone or wallpaper.

More details on category monetization and Android Market’s key metrics overview in the new volume of research2guidance’s free “Android Market Insights”.

The “average app” has a better chance to generate downloads on “non-hyped” platforms.

These findings are taken from our new Smartphone App Market Monitor V.3.

Despite all the hype around the major platforms Android and iOS, publishers are still overlooking the hidden potentials of the niche players.  The Q2 2011 results of our smartphone application monitoring report indicate that those applications published on the less popular platforms, such as WP7 marketplace or Blackberry’s AppWorld, generate significantly more downloads compared to the Apple App Store.

Nokia’s OVI store still generates highest average downloads per app

Average Symbian app makes 160% higher downloads per day compared to iOS app

Significantly lower competition, yet a sufficiently large user base that desires apps, are the major reasons for this.  Symbian still retains, by far, the highest potential user base. Even though its users are incomparably less active than iOS’s heavy downloaders, it still generates significant download volumes to Symbian publishers.  This is largely because whilst Apple boasts of its 400,000 apps, the OVI store contains less than a tenth of that number.

Looking into average numbers, the Android Market stands not far behind the Apple App Store.  This quarter, the average Android App attracted just 5% less users than iOS.  Competition is harsh.

However, going in for very small niche platforms may not be the best idea either. LG World! and Samsung’s App Store are struggling to generate user attention.  Although LG has less than 3,000 apps and as a result it is much easier to be discovered there, its user base is just too low.

Symbian is not dead.

Although the Symbian platform is seen by some developers to be clumsy and outdated, as well as Nokia’s transition to WP7 which has fuelled discussions as to when Nokia will give up its platform completely, the current status seems to be promising.  Recently, Nokia reported the launch of three new Symbian Smartphones and confirmed that these will not be the last of the products, nor updates, to be delivered on Symbian.

We invite you to comment and share your opinions on the future of Symbian.

You can find other important Q2 2011 market developments in the new volume of the research2guidance Smartphone App Market Monitor. The third volume of the report includes a special interest chapter on mobile retail market.