Skip to main content

Report: Apps industry surging to $25 billion

By Kevin Voigt, CNN
updated 5:37 AM EST, Tue March 5, 2013
STORY HIGHLIGHTS
  • The global app industry will grow to $25 billion in 2013, Gartner Inc. projects
  • Comes as sales of smartphones are projected to eclipse feature phones for the first time
  • Last month, China became the top market for Android and Apple iOS smartphones and tablets
  • Smartphone users in the U.S. now spend more than two hours a day using apps

(CNN) -- In 2007, at the dawn of the app market, few would have predicted the industry would soon become a billion dollar business. But thanks to the popularity of Apple's iPhone, Google's Android and other smartphone platforms, the app business is booming.

Mobile phone apps are expected to generate $25 billion in worldwide sales in 2013, up 62% from last year, according to new research from Gartner Inc. The study was first reported by the Wall Street Journal Monday.

The exponential growth mirrors that of smartphones -- for the first time this year, more smartphones are forecast to be shipped globally than feature phones, according to a report released Monday by IDC, the technology market research firm.

IDC projects that vendors will ship 919 million smartphones this year -- 50.1% of total mobile phone shipments. "Much of the world's smartphone shipments were a direct result of demand in mature economies such as the U.S.," IDC wrote. "The balance of smartphone demand is gradually shifting, however, to emerging markets where smartphone user bases are still relatively small and economic prospects are considerably higher."

FC Barcelona: More than social media
New technology to save money
Map apps: Google vs. Apple

China is leading the charge in the developing world, passing the U.S. last month to become the world's top country for Android and Apple iOS smartphones and tablets, according to Flurry Inc., a mobile analytics firm.

That's helping to feed the app frenzy. Apple and Google now have more than 700,000 apps in their respective app stores. The time people spend using apps is growing, too. From December 2011 to December 2012, time spent by app users in the U.S. grew from 94 minutes to 127 minutes a day, according to Flurry.

The new "app economy" has created about 466,000 jobs in the U.S. from 2007 to 2012, according to a study last year by TechNet.

But the explosion of smartphone applications will likely decrease the odds for bedroom developers dreaming of app riches. "You do still see the success stories but they are fewer and farther between," Mashable's Christine Warren told CNN.

"A lot of it has to do with luck," she said. "Having a well-designed app, an app that works well with mobile so it takes advantage of the camera, it takes advantage of geolocation features, it can connect in with other apps and services -- that goes a long way.

Catching the attention of the right websites and "staying in the top 10, top 50 of the best selling list goes a long way toward long-term success," she said.

CNN's Andrew Stevens contributed to this report.

ADVERTISEMENT
Part of complete coverage on
updated 11:37 AM EDT, Thu April 10, 2014
Cyprus, the tiny Mediterranean island bailed a year ago, is starting to rebuild itself, the finance minister tells CNN.
updated 7:57 AM EDT, Thu March 13, 2014
Mobile World Congress spans the full spectrum of untethered gadgetry Explore this year's top trends with Stuff Magazine Editor Will Findlater.
updated 8:03 AM EDT, Tue April 8, 2014
CNN's John Defterios says India's election race will likely boil down to three simple numbers: growth, inflation and interest rates.
updated 7:07 AM EDT, Thu April 17, 2014
More than a million Londoners live in flatshares. And while this used to be associated with students, more mature people find themselves sharing.
updated 6:50 AM EDT, Wed April 2, 2014
Nina Dos Santos visits Baselworld the world's most prestigious event for top jewelry and watch brands.
updated 9:24 AM EDT, Wed April 2, 2014
Will Xi Jinping's historic visit to the European Union headquarters help the Chinese leader get what he needs from the EU?
updated 9:28 AM EDT, Fri March 28, 2014
Binnaz Saktanber says many feel trapped between their brains, telling them to leave Turkey, and hearts, which tell them to stay.
updated 6:57 AM EDT, Tue April 1, 2014
"I thought I'd sold it," says Norwegian man who left luxury boat in marina two years -- with keys tied to railings. What happened?
updated 6:27 AM EDT, Wed April 2, 2014
The United Kingdom is champagne's biggest export market. CNN's Isa Soares reports on what's driving sales.
updated 7:51 AM EDT, Wed March 26, 2014
"Sorry, I don't go south of the river," was once a common refrain from London taxi drivers. Not anymore. South London is booming.
updated 2:34 PM EDT, Fri March 21, 2014
The list of Russians targeted by Western sanctions includes people from Vladimir Putin's inner circle -- including his judo sparring partner.
updated 11:58 AM EDT, Tue March 25, 2014
Her passion for public speaking and networking have earned Julia Hobsbawm the moniker "queen of networking." What is her secret?
Google Glass is trying to shed its public relations problem of a nerdy image by teaming up with the company behind Ray-Bans and Oakley sunglasses.
updated 9:37 AM EDT, Mon March 24, 2014
European leaders are meeting in Brussels to discuss further sanctions against Russia. But they are likely to be cautious. Here is why.
ADVERTISEMENT