What is the Size of the Mobile App Development Market?

When was the last time you opened an app on your phone? Probably not too long ago. In fact, 90% of the time spent on your phone is spent on apps. They demand far more time than your standard calling and texting. There are apps for all sorts of things: gaming, music, fitness, reading, language learning, and dating, just to name a few. These days, nearly every fast food chain and sports team has its own app.

To further put the app industry into perspective, consider this: There are 3.5 billion smartphone users across the world, and Americans check their phone once every 12 minutes. That is 80 times per day. Certainly, we don’t check our phones just to text. Apps demand our attention, too. They operate on smartphones after all, which lie within reach of our pockets, constantly demanding our attention.

Source: https://www.smartinsights.com/mobile-marketing/mobile-marketing-analytics/mobile-marketing-statistics/

Because smartphone apps can satisfy most users’ internet needs, a growing share of Americans use smartphones as their primary means of online access at home. There is huge potential in the mobile app development market as more people rely on their mobile devices day in and day out. Read on for a detailed overview of the mobile app market and its future.

What is Mobile App Development?

Mobile app development is simply the process of creating apps. As with any software development, mobile apps require extensive coding. But coding is not all. The steps to mobile app development include formulating the idea, crafting the design, programming, testing, launching, and of course, marketing. Only after completing these phases does a new app have the potential to succeed.

There are different types of apps. Apps made for a particular device and its processor are called native apps. Native apps are installed directly onto the device and do not necessarily require internet access. Apps that work in your browser are called mobile web apps. They don’t need to be installed onto the device. They are device-agnostic, meaning they work across multiple different devices, so long as the device has a web browser with internet access. Finally, hybrid apps are apps that combine features of both native apps and web apps. They are installed like a native app, but they display web content like web apps. Essentially, they are web apps in a native app shell. Once installed, hybrid apps rely on the internet to function and have a browser embedded within the app.

Many apps are developed to work across multiple devices, including smartphones, tablets, computers, and even wearables (e.g. smartwatches). Whatever the device, mobile apps must take advantage of the device’s unique features, which vary. For example, a large tablet may not be suitable for an app that tracks your pace because it’s too large to carry while running. Instead, a smartwatch will do the job best. Of course, the most popular app platform is the smartphone. Smartphones are so dynamic that many people use them as their all-in-one device.

Not only are apps made for different hardware but they are developed for different mobile operating systems. The most popular two operating systems (OS) for mobile devices are Android and iOS. Each has their own app store with a huge selection of free and paid apps. The Android OS is open-source and uses programming languages Eclipse and Java, while iOS is closed-source and uses programming languages Xcode, Objective-C, and Swift.

Most mobile app developers use the help of software development kits (SDKs). SDKs are a collection of software development tools that facilitate app development. They can simplify the work and save a lot of time. Google’s SDK for creating apps is called Flutter, and Apple simply calls theirs iOS SDK.

In addition, there are low-code and no-code apps designed specifically for developing mobile apps. Some low-code and no-code apps include Appery.io, Mobile Roadie, GoodBarber, Appy Pie, and AppMachine. Unless you want to start from scratch, consider exploring different SDKs and low-code and no-code tools for your mobile app developing needs.

Market Size & Growth for Mobile App Development

The market for mobile app development is growing fast. In 2018, it was estimated at $106.27 Billion. And in a study of the years 2019-2026, researchers found that it is growing at a CAGR of 18.4% to reach $407.31 Billion by 2026. That is about four times the size of the market for laptops.

Consider the revenues from mobile apps, too. In 2020, the revenues were 581.9 billion USD, and they are projected to reach nearly a trillion USD by 2023.

Source: https://www.statista.com/statistics/330695/number-of-smartphone-users-worldwide/

With an increasing reliance on smartphones, the mobile app market is going to keep growing for the foreseeable future. Even if humans replace their smartphones with smart watches, mobile app development will still be required. So now is the time to invest in mobile apps.

Market Characteristics of Mobile App Development

The mobile app development market is first shaped by app stores. Google Play is the largest app store with 2.87 million apps for phones with Android OS. Apple’s App Store comes in second, offering 1.96 million apps. Finally, Windows has its own app store with 669,000 apps, and Amazon has its own with 455,000 apps.

Developing a mobile app costs money. To start, it can cost $5,000 to $15,000. From there, you still have ongoing maintenance and marketing costs. All in all, the total cost of developing an app depends heavily on the app’s complexity: A basic app costs roughly $25,000. A medium complexity app costs between $40,000 and $70,000. And a complex app costs over $70,000.

But apps make money in return. In fact, there are several ways to monetize apps. Consider the following monetization models:

• Direct sales—A direct sales strategy is the easiest way to monetize your app. List your app on one or multiple app stores for a one-time purchase price. Then every time someone wants your app, they must download it for a price you set. So long as your app remains useful and relevant, you will collect revenue indefinitely.
• Freemium—A freemium business model means listing your app for free while offering an optional paid version. Typically, the paid version will offer additional features, while the free version is limited to basic functions. One benefit to the freemium model is its ability to draw users in because the app is free. Then once users get a taste for the app and decide they like it, they usually pay for the full version.
• Subscription—A subscription model works just like any other subscription. You make the app available to those who actively pay a subscription fee. Typically, it is a monthly fee, but it could be annual, weekly, etc. With a subscription revenue model, you generate a fairly regular income from your app’s users. The subscription rate remains constant. So revenue generally only fluctuates with the amount of subscription sign-ups and cancellations.
• In-app Purchases—You may also consider monetizing your app through in-app purchases. In-app purchases come in many forms, but the idea is to sell features, products, or other services within the app. This way, you can offer the app for free, but make money within the app. Examples of the in-app purchase model include games in which unlocking certain levels or features costs money and restaurant apps that allow you to place orders within the app. Such apps never cost to download and install, but they can still earn plenty of revenue from within the app.
• Crowdfunding—Crowdfunding is a great option for monetizing your app when you lack the funds to get it off the ground. As the name suggests, crowdfunding is taking in money from supporters of the app. Typically, you must run a promotional campaign to find donors and then promise them future benefits for funding the app. Benefits could include equity in the company, special app features, or other perks. Some platforms for crowdfunding include Kickstarter, AppsFunder, and CrowdFunder.
• Sponsorship—App sponsorship is similar to crowdfunding in that your app is funded by someone else, but instead of by ordinary people, your app is funded by another company. By sponsoring your app, other companies are entitled to exclusive access to the app’s audience. The sponsor gets free advertising by being visible within the app through its marketing campaign and slogans such as “brought to you by.” Make sure to still integrate your sponsor into the app naturally. Otherwise, the sponsor may appear too intrusive to app users.
• Advertising—As with the business model for much of the web, advertising is a popular way to monetize apps. When mobile apps were introduced in 2008, app developers quickly adjusted ads for small mobile screens to display within apps. There are several different mobile ad types:
  • Banner ads are perhaps the most familiar type of app ad. Banner ads are images placed within the app alongside app content. Usually set off to the top or bottom of the screen, banner ads can appear intrusive and spammy. Nonetheless, they remain a powerful ad revenue generator.
  • Native ads are less intrusive because they are designed to match the look and feel of the app. They are almost indistinguishable from regular app content. For example, a native app could look like a regular post on Facebook or a regular picture on Instagram. Native apps are a good option if you want your app to maintain a cohesive feel.
  • Interstitial ads are full-screen ads that appear at transition points in the app. Because they are full-screen, they require app users to engage with the ad or close it before moving on. They usually appear at natural transition points like between levels in a game. However, they can still feel intrusive to users if they obstruct app use too much.
  • Offer Wall ads appear on a page within the app that lists tasks to earn different rewards. Such tasks could include downloading an app, watching a video ad, or making in-app purchases. In exchange, users are rewarded with in-game currency, perks, or extra “lives” in a game. Offer Wall ads can be cumbersome to integrate into an app, but users often respond to them more because they stand something to gain.
  • Video ads are short 15-30 second promotional clips. They can be a great way to engage users because people like to watch videos. Developers earn ad revenue every time users watch a video ad. Sometimes video ads are interactive to increase user engagement even more. With proper placement, video ads can be very effective.
  • Playable ads are short games usually placed within game apps. They allow users to briefly try out a different game in hopes that they will like it enough to download the full version. Playable ads are very interactive, allowing users to get a brief taste of the app being advertised.

To integrate ads into your app, you must choose an ad network like Google’s AdMob. They connect you, the publisher, with advertisers and offer different ad pricing models. The most popular ad pricing models include the following:

• Cost per mille (CPM)—The CPM ad pricing model pays publishers every 1000 times an ad is displayed on their app.
• Cost per click (CPC)—As the name suggests, the CPC model pays publishers every time an ad is clicked on.
• Cost per action (CPA)—The CPA model pays publishers only for clicks that lead to a specific action. Such actions could include signing up for a newsletter, installing an app, or taking a survey.

Advertising is one of the most popular ways to monetize apps because it allows you to offer the app for free. In this model, app users become the product, while advertisers become the payers. If you can manage to place ads strategically, your app can generate a limitless amount of money.

Market Trends within Mobile App Development

Source: https://www.marketresearchfuture.com/reports/mobile-app-development-market-1752

Businesses large and small are investing in the development of mobile apps because companies recognize their value. Below you will find some of the current trends within the mobile app development market:

• Blockchain—Blockchain has attracted much attention in the mobile app industry. The record-keeping technology is famous for driving cryptocurrencies like Bitcoin, but it also offers a powerful opportunity for enhanced security and transparency in mobile apps. The decentralized system timestamps every transaction and makes it public, which allows mobile apps to steer clear of storing credit card information. Selling the app, monetization, and in-app purchasing can all be streamlined by taking out other financial middlemen. If you are interested in hiring a blockchain developer, co can help.
• Internet of Things (IoT)—The Internet of Things refers to connecting different devices to each other via the internet. The devices can be anything from coffee machines to house lights, including several wearable technologies like smartwatches. The future of IoT is to create smart homes and even smart cities in which everything can be controlled from a central remote, like a smartphone. Mobile devices act as the main interface. So the potential for mobile app development in IoT is just being realized.
• Artificial Reality (AR) and Virtual Reality (VR)—Mobile app development has seen an increased demand for AR and VR technologies. The versatile technologies are especially popular in the video gaming industry. Think of games like Pokémon GO. Mobile apps are just beginning to harness the true power of VR and AR. No wonder their market is projected to reach over 2,000 billion USD by 2027. VR and AR development are growing markets, especially for mobile apps.
• Cloud-based Apps—Cloud-based servers free up space on your smartphone by storying data otherwise stored on the smartphone. But cloud-based apps have the additional advantage of being compatible across multiple platforms. With the app data stored in the cloud, you can more easily use the app on both iOS and Android. Furthermore, no installation is needed and data recovery is much easier. Cloud-based storage solutions are the future.
• Mobile Wallets—Mobile Wallets are becoming increasingly popular. Large companies are trying to bypass the need for cash and credit cards by having customers make transactions directly from their phones. Some popular mobile wallets include Apple Pay, Google Pay, and Samsung Pay. In 2019, there was 1 billion USD worth of transactions from mobile wallets. The push for mobile transactions has only increased the demand for the development of such payment gateways in fintech.
• Chatbots—When it comes to online support, people don’t like talking on the phone or emailing as much as they used to. Instead, they like chatting. Chatbots allow customers to interact with online businesses 24/7, quickly and efficiently, without the need for human support agents. Many mobile apps have started implementing chatbots into their user interfaces (UI). For example, Starbucks and Dominoes have apps that allow you to order coffee and pizza via chatbots. And they are not alone. 80% of enterprises are expected to use chatbots in 2020. As companies continue to commission the development of apps, they will request the development of chatbots to go with them.

Benefits of Mobile App Development

Source: Forbes.com

Mobile apps will improve your business. Not only do they open your business up to innovation but they increase brand recognition and customer loyalty.

Apps are faster than websites. Websites rely on constant internet connection, while apps can be installed directly onto the phone. Even if the app requires some internet connection, it will run faster and more smoothly than a website will. By optimizing the user experience and creating a constant reminder for engagement, mobile apps retain clients at a higher rate.

Mobile apps convert visitors into customers and increase sales. As discussed, people simply spend more time on their smartphones these days. Customers spend 3 to 4 times as much time on mobile apps as they do on desktops. The chances of winning over customers are simply higher on apps.

Mobile apps have sleek designs and interfaces. They have features that integrate with your smartphone’s microphone and GPS. These features include voice recognition or navigation. App users are more easily advertised to and encouraged to promote branded content. Ultimately, apps can provide an attractive platform to draw in more customers.

Find a Mobile App Developer

Most any brand has an app. If you don’t believe me, simply type a brand into the search bar of your smartphone’s app store. See if there isn’t an app for your favorite fast food chain, newspaper, or sports team. There probably is. All the more reason to invest in mobile app development. You don’t want to fall behind the curve by not having one.

That said, developing a successful app is no simple task. It takes creative design, a friendly interface, multi-platform functionality, data security, and ongoing support. If you have a project in mind, Dev.co can help. Learn more about what we have to offer here.