ARCHIVES: This is legacy content from before Industry Dive acquired Mobile Marketer in early 2017. Some information, such as publication dates, may not have migrated over. Check out the new Mobile Marketer site for the latest mobile marketing news.

Mobile apps to generate $1.6 billion in revenue in 2010: Study

Mobile applications will generate nearly $1.6 billion in revenue in the United States this year, according to a new study by the Yankee Group.

According to the report, there are several factors which include the increase of smartphone shipments, more application stores and more expensive applications. Apple iPhone users and AT&T subscribers download more applications than anyone else, but Yankee Group predicts that Android will be the next breakout smartphone application platform.

?Two factors drove us to increase our forecast,? said Carl Howe, director of anywhere consumer research at Yankee Group, Boston, MA. ?An increase in the percentage of apps that consumers were willing to pay for ? up from 18 percent in August to 30 percent in January ? and an overall increase in average paid application price from $1.99 in August to $2.85 this year.

?Our 2009 forecast was $343 million, but that was using the prior paid app ratio of 18 percent with an average price of $1.99.

Yankee Group is a research firm that is focused on connectivity and technology.

Application increase
The report found that paid applications are on the rise and nearly a third of downloads are purchased, compared with just 18 percent last year.

Apple iPhone users download 60 applications per year, which is three times the average, while AT&T users download 27 applications annually ? 42 percent more than average.

Additionally, T-Mobile comes in second for all carriers, with its users downloading more than 18 applications per year on average and two-thirds of applications downloaded by Verizon user are paid, which is the most of any carrier.

?I think that this is a market that is growing for all the major platforms at present,? Mr. Howe said. ?Given that we're forecasting the market to grow by nearly a factor of 10 in 5 years, I don't see much cannibalization taking place.

?That said, we do think Android will be the next breakout platform,? he said.

Consumer download
The study also revealed that BlackBerry users are the second most frequent downloaders with an average of 3.6 applications over three months and on average, 1.3 of those are paid.

Nokia smartphones come in third with an average of 3.3 applications over three months and Palm users downloaded the least with only 1.8 applications over three months.

?Two years ago, applications were mostly an ?I'll try one or two? type of experience, but now, based on Apple's marketing of its one-click buying and downloading process, consumers now see applications as a cheap and easy way to customize their mobile experience,? Mr. Howe said.

?Best of all, it's all affordable ? an application costs no more than a magazine a consumer might buy at a newsstand, making it a disposable purchase, with no ROI calculation required,? he said. ?We don't see this gold rush going on forever ? we think that application fatigue will eventually set in as more content on the Web is usable on all smartphones and as consumers fill up their phones with all the applications they really want.

?However, based on current data, that time of application fatigue is years off for the general population that is just getting started with the mobile application gold rush.?