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Mobile App sales expected to top $15 Billion in 2011

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Worldwide revenue from the sale of of mobile applications is projected to surpass $15.1 billion in 2011, up 190 percent from $5.2 billion in 2010, according to research firm Gartner.

The revenue estimates consist of both end users buying applications from Mobile App stores and the advertising revenue generated from the applications themselves.

In research released today, Gartner predicts the number of applications downloaded from app stores such as Google's Android Market and Apple's app store will reach 17.7 billion in 2011, a 117 percent increase from an estimated 8.2 billion downloads in 2010. By the end of 2014, the total number of apps downloaded is forecast to top 185 billion since the launch of the first one in July 2008.

Last week, Apple announced that iOS users had downloaded more than 10 billion apps from the Apple app store in the last two and a half years including more than seven billion apps in the last year alone. Gartner estimates that 90% of all downloads in 2010 were from the Apple app store and expects that Apple will remain the number one mobile app seller through 2014.

Free downloads are forecast to account for 81 percent of total mobile application store downloads in 2011. This percentage has been decreasing since the first launches in 2008, and Gartner estimates free downloads will continue to decrease in 2011. The researchers believe consumers will begin paying for more applications as they become more trusting of online ordering and because they see the value in the applications.

Application stores' revenue is split between the store owners (such as Apple, in the case of the App Store, or RIM, in the case of App World) and the application's developer. The average revenue share is based on a 70/30 split, with 70 percent going to the developer. By the end of 2014, advertising will be generating a little under a third of the revenue generated by application stores, up from 16 percent in 2010.

Discuss in Digital Home's Smartphone and Smartphone App forum .

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