Free mobile apps: good growth ahead and healthy profits

Free apps for smartphones will really take off this year.  Both software developers and the owners of the big download platforms alike are keen to make money from ads which will soon be making their way onto your handset.

The growth of the application ecosystem that surrounds the latest generation of smartphones shows no signs of signs of slowing down.  The business model--made famous by Apple, which still dominates the market--will continue to attract the three key groups: the brands with an application marketplace (mobile phone operators and manufacturers); the users themselves and the developers, the brains of the operation, whose efforts have a direct impact on the quality and number of apps actually available.

By 2013, mobile downloads should continue to soar, with an estimated 26.1 billion, compared to 4.5 billion in 2010.  Naturally enough, the revenue generated by these little programs is also predicted to rise.  The anaylsts Garnter have recently concluded a study of different app stores predict income of 29.4 billion dollars by 2013, compared to (just) 6.7 billion this year.

Free takes over

After quickly becoming the defining model online, free content will also rule the roost with apps.  Of course, though, there's no such thing as a free lunch.  Google knows that well, even if many of the people who use its services every day don't pay a penny.  To provide a free service and still make money (otherwise, what's the point?), providers need to rely on advertising.  That's what we're going to find in free apps soon, with sponsored links, for instance.  In short, if the user doesn't pay, they'll have to put up with being the target of choice for advertisers.  It's an arrangement that doesn't seem to put anybody off just yet: Gartner are predicting that 87% of all apps downloaded in 2013 will be free to the user but make money from advertising.

Of course, it's hardly coincidental that both Google and Apple have recently paid top dollar to bring their own advertising back in-house …

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