Mobile developers hoping to cash in on a blockbuster app have bad news from research firm Gartner: More competition and higher demands from users will make it even more difficult for developers to make money from smartphone and tablet applications.
The Google Play app store and Apple's iTunes store both have more than 1 million apps. That adds up to too many choices for users, and makes it harder for developers to get noticed or make money from their applications.
Today about 90% of paid applications are downloaded less than 500 times per day and make less than $1,250 a day, according to Gartner. This will only get worse, thanks to greater competition. In addition, applications will have to become more sophisticated to keep up with user demands, so operations, development, testing, deployment and support will become more expensive, it said.
This means by 2018, only one in 10,000 consumer apps will be considered a financial success by its developers, according to the market research company.
Developers need to prepare for this scenario and should set realistic expectations. If the goal is to make money directly from the sale of the app, developers need to thoroughly assess the concept, the costs and the opportunity, because the likelihood of success is minute, Gartner said.
The share of free apps is also predicted to rise from 91% last year to 94.5% in 2017. In the same period, the total number of downloads is expected to grow from 102.1 billion to 268.7 billion.
The growing number of available applications is also changing the way users find apps. Consumers can't sort through these large numbers and instead depend on suggestions from recommendation engines, friends, social networking or advertising to discover mobile applications, according to Gartner.
Gartner also said that the number of paid downloads will continue to grow, even though they are a smaller percentage of the total, and will reach 14.8 billion by 2017, compared to 9.2 billion last year.
There's always the possibility of the exception: a student in a basement developing a one-of-a-kind application that becomes wildly successful, Gartner said.
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