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Gartner: 102B App Store Downloads Globally In 2013, $26B In Sales, 17% From In-App Purchases

Ongoing trends in smartphone adoption — which this year finally outnumbered the amount of non-smartphones getting purchased — will drive 102 billion app store downloads this year …

TechCrunch Ingrid Lunden

Context & Ripple Effects

Gartner's forecast lands at the crossover point the firm itself flags: 2013 is the first year smartphone purchases outnumber non-smartphone purchases, and that newly dominant installed base is what carries global app store downloads past 102 billion. The figure that matters most for developers inside the projection is the composition of the money — only 17% of the projected $26B in sales comes from in-app purchases, meaning paid downloads and other store transactions still carry the bulk of revenue even as free downloads dominate volume.

The story travelled unusually widely for an analyst number: same-day pickups spanned Mashable, ZDNet, The Guardian, eWeek, TechHive, The Next Web and memeburn, reflecting how much weight Gartner's app-economy tallies carried for developers and investors calibrating monetization strategies at the moment the smartphone became the default phone.

First-order effects

  • Developers now have an analyst-endorsed benchmark that freemium works at scale — with 17% of a $26B market flowing through in-app purchases, giving away the app and selling inside it is validated as a mainstream revenue path rather than an experiment.
  • Feature-phone makers and the carriers who sold their devices face a shrinking addressable base, since Gartner puts smartphone purchases ahead of non-smartphones for the first time this year.

Second-order effects

  • With free downloads driving the bulk of the 102B installs, competition among developers shifts from getting discovered to converting users after install — pushing product roadmaps and marketing spend toward retention and in-app purchase mechanics instead of price-tag positioning.
  • The operators of the major storefronts gain leverage as the funnel through which essentially all of that $26B passes, making their revenue splits and featuring decisions a direct input into developer margins.

Third-order effects

  • If the pattern holds, the app economy structurally consolidates around platform gatekeepers who tax store transactions — storefront terms become a standing cost of doing business for every mobile developer, not a choice.
  • As smartphones become the majority of phones sold, mobile stops being a secondary screen for media and commerce companies and becomes the primary one, forcing budget reallocation across the broader software industry.

The trend: Mobile software economics is tipping from paid downloads toward free apps monetized in-app, with smartphone adoption crossing the halfway mark as the force setting the pace.