App economy expected to double by 2017 to $151B

Innovations with smart TVs and connected cars will help drive app commerce

The combined value of paid apps, app-enabled purchases of goods and services, and in-app advertising is expected to double to $151 billion in the U.S. by 2017, AppNation said today.

According to the research firm, the largest segment of the so-called app economy is app-enabled sales of physical goods and services, which accounted for about $45 billion of the nearly $60 billion total at the start of 2013. By the middle of this year, the $60 billion total had reached about $72 billion, and that figure is expected to more than double to $151 billion in 2017.

AppNation said paid app downloads account for just a sliver of the total. Less than $1 billion of this year's app-related revenue comes from downloads, and revenue from downloads is projected to just slightly surpass the $1 billion mark in 2017.

"Despite the massive popularity of apps and a saturated marketplace in the U.S., the overall growth rate in the app economy is still accelerating and will [continue to accelerate] until at least 2015," said Drew Ianni, CEO of AppNation. "With the number of apps used per day by U.S. consumers still expanding, and as time spent on mobile devices shifts more to use apps versus other media, it is clear that there is still a lot of runway ahead of and across all key sectors of the app economy."

AppEconomy also surveyed 2,500 U.S. online consumers, finding that mobile users under 45 are using video apps twice a week. Also, most consumers say that they find new apps through word of mouth.

The AppNation report, co-authored by Ross Rubin, an analyst at Reticle Research, noted that smartphones and tablets drive the app economy today, but connected cars and smart TVs will add to total app usage.

This article, "App Economy Expected to Double by 2017 to $151B," was originally published on Computerworld.com.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

See more by Matt Hamblen on Computerworld.com.

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