As Apple's App Store turns 6, apps are big business
Today is the sixth anniversary of Apple's App Store, which now offers over one million apps and has helped transform the broader app economy from a niche market into a global phenomenon.
Since 2008, total global app sales have amounted to about $30 billion, according to Frank Gillett, an analyst at Forrester Research. He says app sales will total $100 billion by 2020. However, downloads are only a small part of the overall app economy. The market is even bigger once subscriptions, services and hardware are included.
"That's only measuring what people paid through app stores," Gillett says. "It turns out, there is a lot of free apps that go with services that are paid for outside the app store, or are tied to hardware purchases that would not have happened otherwise."
A lot of companies compete in the app economy, but the two biggest are Apple's App Store and Google's Play store. So, how do these two tech titans compare?
There are now 1.2 million apps available in the App Store versus 1.5 million in the Play store, according to App Annie, which provides market data about the industry. App downloads from the Play store actually exceeded the App Store for the first time last year, driven by growth in an emerging market that includes Brazil and Russia.
But, when it comes to making money from those apps, Apple is the clear winner. Apple's platform generated more than twice as much revenue for developers last year, according to App Annie. One reason is that Apple customers, who generally can afford premium products, tend to have more discretionary income and can spend more on apps.
For both Apple and Google, the big driver of downloads is games. The top game by revenue in 2013 was a game that's free to download: "Puzzle & Dragons," which is published by Japan-based Gungho Online Entertainment. Its revenue comes from in-app purchases. So far, about 35 million people have downloaded the game.
The "Candy Crush Saga" by King Digital came in second, while a game about the "Simpsons," published by Electronic Arts, rounded out the top five.
Messaging app LINE tops the list of top non-game downloads by revenue. LINE lets users make calls and send messages for free. It now boasts almost 500 million users in more than 230 countries.
Other popular apps include Pandora Radio, the dating app Zoosk and Badoo, a social network attracting 100,000 news users every day.