User appetite for apps continues to surge

If you're looking for some positive momentum to carry you into next week's CTIA Wireless 2010 event in Las Vegas, look no further than the mobile applications segment, which continues to perform so well that research firms are revising their already lofty revenue expectations. Yankee Group, which previously forecasted U.S. mobile app revenues would reach $537 million in 2010, now anticipates revenues will instead double to $1.6 billion by year's end. Yankee credits the app explosion to drivers like increasing smartphone shipments and new app storefronts, as well as growing consumer interest in paid apps--premium mobile software now represents almost a third of all app downloads in the U.S., up from just 18 percent a year ago. App prices are also on the rise, with the average premium app growing from $1.99 a year ago to $2.85.

The phenomenon isn't limited to the U.S., of course. Mobile application downloads across all handsets worldwide are poised to grow from 7 billion in 2009 to almost 50 billion in 2012--a year-over-year growth rate of 92 percent--according to a new report compiled by consulting firm Chetan Sharma Consulting and commissioned by independent app store GetJar. At current projections, the global mobile apps economy will generate sales of $17.5 billion by 2012--Chetan Sharma anticipates that off-deck premium app sales will account for almost half of all application revenues by that time, while on-deck operator app sales, which represented more than 60 percent of apps revenue in 2009, will slip to under 23 percent in 2012.

Developers appear to be working day and night to keep up with demand. With Apple's new iPad slated to hit retail early next month and pre-orders surging, mobile applications analytics provider Flurry reported this week that iPhone OS application starts have jumped a staggering 185 percent since Apple officially announced the tablet device on Jan. 27. The App Store now boasts more than 150,000 applications for the iPhone and iPod touch, according to a statement on Apple's website--that's roughly five times the number of apps in Google's rival Android Market, but Android development is accelerating as well. Google said this week that its Android Market mobile applications storefront now boasts about 30,000 apps; just three months earlier, the store offered 16,000 apps. If Vegas has taught me anything, it's that there's no such thing as a sure thing, but it looks like the mobile app biz is poised to continue surpassing oddsmakers' expectations for some time to come. -Jason

P.S. Speaking of Las Vegas, I'll be there all next week with the rest of the FierceWireless crew as we cover CTIA Wireless 2010 from top to bottom. As usual, you can find our reporting and analysis in each newsletter, on the websites and at our dedicated site, www.CTIALive.com.