App revenues on course to hit $99bn by 2019

There’s still money to be made in apps and not just from massive acquisitions either.

According to mobile research house Juniper Research, annual revenues from apps accessed via smartphones and tablets are expected to reach US$99-billion by 2019. The majority of these revenues, the company says, will continue to come from games for the next five years. It adds however that the highest growth will likely be experienced in areas such as lifestyle applications (such as dating and navigation) and eBooks.

Dating especially looks set to go big. Juniper’s research shows that a significant proportion of online dating activity is now migrating to mobile devices, with dating accounting for four of the top 20 grossing UK iOS apps in early-2015 (Match.com, Zoosk, Tinder and Plenty of Fish). The report argues that with online dating now mainstream, most net growth in the sector is likely to occur via smartphone usage.

Read more: App Annie December 2014 data shows rise in security and selfie apps

Navigating to a sustainable model

One app category that’s bucked the freemium and use a PPD (Pay Per Download) models used by many of the most successful apps is navigation apps. According to Juniper, many of these apps charging a high (US$50 plus) one-off price. It argues however that the model is expected to transition to a subscription-based model, with features including live traffic updates allowing for ongoing revenue streams. Adapting this model may, in fact, be necessary for their survival given that barely one percent of applications are now paid for at the point of download.

Another thing that the research makes clear is that mobile operators still have to find a way of making revenue from apps. App storefronts maintained by the networks now account for less than two percent of app downloads worldwide.

According to research author Dr Windsor Holden, “Operators have finally recognised that they cannot compete with Apple and Google from a content distribution basis. If they are to monetise content, that revenue has to come from bundling content into subscriptions or through leveraging the billing relationship.”