Mobile app market set to boom! But will it generate marketing revenues?

Mobile app downloads are expected to increase from more than 7bn downloads in 2009 to almost 50bn in 2012, according to a new report from Chetan Sharma Consulting. The figures mean that app downloads will overtake CD downloads, but what’s in it for marketers?

The Chetan Sharma Consulting study, commissioned by app store Getjar, forecasts that the global mobile application economy will be worth $17.5bn by 2012.

The study also highlights that initially, the focus of making revenue from apps was based on paid downloads or subscription-based models. This however, is about to change.

Today, advertising-based revenue accounts for about 12% of app revenue, but by 2012 this figure is expected to rise to 28%.

It’s no wonder that Google has looked to cash in n the market. Its Android smartphone market now has over 30,000 available apps. This is way behind the Apple App Stores 100,000 applications – but then 30,000 applications is not a small number.

The price of mobile applications ranges from $0.99 to $999 but the average selling price in 2009 was about $1.90, the study says.

Over the next three years this is predicted to decrease by 29% and apps will get cheaper; however, advertising revenue derived from apps is likely to stay relatively flat.

More good news for the Android though, advertising revenue is predicted to be even bigger than revenues from paid app downloads.

By 2012, so-called “offdeck” apps that are offered independently from a carrier will be the biggest revenue generator, accounting for almost 50% of all app revenue.

By comparison, in 2009, apps available from mobile operators still accounted for more than 60% of all app revenue, but this will fall to just under 23% by 2012.

So who’s ahead in the game?

Easy: Apple. But Google is gaining some ground.  

Despite mobile analytics company Flurry revealing that sales of Google’s Nexus One have so far been “disappointing”, if you add the total sales units for the Nexus One and Droid, Google is beating Apple.

The Nexus One sold a mere 135,000 units compared to Motorola Droid’s 1.05 million and Apple iPhone 3GS’ 1 million, since January.

Chetan says that the mobile app market will continue to grow “exponentially” as mobile devices become as powerful as computers, and wireless networks deliver consistently higher bandwidths.