Mobile App Revenue to Reach $38 Billion by 2015, Report Predicts
It may be hard to remember, but when the Apple iPhone had its debut in early 2007 there were only a few apps available for the device — no Angry Birds, Doodle Jump or Netflix. — Today it's a different story.
Context & Ripple Effects
This forecast extends an arc that began with the March 2010 projection of a $17.5 billion app market by 2012: a year later, analysts are calling for $38 billion by 2015, more than doubling the earlier estimate's horizon and scale. The baseline is the iPhone's 2007 launch, when only a handful of apps existed — no Angry Birds, Doodle Jump or Netflix — making the four-year climb one of the steepest revenue ramps in consumer software.
What makes the number credible rather than hype is that mainstream media brands have already validated the channel: Netflix shipping on the platform signals that premium content owners now treat apps as distribution infrastructure, not experiments. For developers and their backers, the report converts enthusiasm into a sized, investable market.
First-order effects
- Independent developers and app-focused startups gain a headline figure they can take to investors, accelerating capital allocation into iOS development just as titles like Angry Birds prove small teams can reach mass audiences.
- Netflix and other established media brands face pressure to treat app-store distribution as mandatory — absence from a market heading toward $38 billion becomes a competitive liability.
Second-order effects
- Rival smartphone platforms must compete for developer attention on revenue potential, not just handset features, since the app catalog is now demonstrably a purchase driver for the devices themselves.
- Apple's cut of a growing revenue pool strengthens its position in carrier negotiations, shifting bargaining power toward whoever controls the storefront rather than whoever subsidizes the phone.
Third-order effects
- If successive forecasts keep revising upward — as the jump from the 2010 estimate to this one suggests — app ecosystems will shift from accessory to core business, with device makers judged increasingly on software revenue rather than hardware margins.
- Sustained growth of this kind invites scrutiny from carriers and regulators over the 30% storefront commission model that underpins the economics.
The trend: Mobile software is compounding from a launch-day afterthought into a multibillion-dollar economy, with analyst forecasts doubling roughly every year and a half since early 2010.