AppNation: App economy will double to $151B by 2017

Over the next four years, money flowing through mobile apps will reach $151 billion, or double the amount today, according to the first report published by AppNation. The conference producer surveyed 2,500 U.S. consumers and aggregated data from Flurry and others as part of its research. Among the findings:

  • 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.
  • App-enabled sales of physical goods and services accounted for about $45 billion in 2013 and are the largest source of revenue.
  • Nearly 11 percent of U.S. consumers now have a vehicle that can support apps on a center console.
  • Three times as many consumers plan to purchase app-enabled TVs versus non-app-enabled TVs in the next six months.
  • The majority of mobile users under age 45 are using video apps twice a week.

"[T]he number of apps used per day by U.S. consumers (is) still expanding, and as time spent on mobile devices shifts more to using apps versus other media, it is clear that there is still a lot of runway ahead of across all key sectors of the app economy," AppNation CEO Drew Ianni said in the press release announcing the report.

A lot of the discussion around revenue models for developers has focused on advertising or in-app purchases of virtual goods. While the AppNation report suggests these things will make money, it's interesting that the biggest sources of potential income are selling physical goods in the offline world. 

However, the report also highlights some areas where developers could start thinking about being early adopters, like smart TVs and in-car apps. That said, even the coolest mobile games may never displace the biggest use cases for smartphones, which according to AppNation remain e-mail, browsing and social media. 

The study also confirmed that the No. 1 app marketing tool remains unchanged: word of mouth recommendations from friends.

For more:
- see the release
- buy the full AppNation report here

Related articles:
Flurry: 90% of iOS apps are free downloads
Distimo: Top-ranking free iOS apps generate at least 72K downloads a day