Borrell Associates: “Preparing for the Appocalypse”

A new report by Borrell Associates forecasts a significant increase in ad spend on mobile apps.  Borrell predicts that “US spending for ads delivered by mobile apps will explode from $305 million this year to $685 million next year”.

The report also forecasts an even higher jump in spend to $8 billion by 2015 – with $1.2 billion of that coming for local advertisers.

Almost 5 billion apps have been downloaded to mobile devices since Apple released its App Store in 2008.  Unsurprisingly, 80% of all the apps downloaded have been free, but users have spent as much as $1.5 billion on the rest.

The report estimates that one in every five computer devices in the US can receive mobile ad messages currently, but by 2015, around three in every five will be able to – which it says is fueling the growth in mobile ad spend.

Borrell Associates’ research also shows that the average smartphone has 22 apps on it, but the half-life of an app is only around one month – so in six months, only 5% of them are retained.

Regardless of this, apps still dominate most digital discussions, and almost all mobile talk, and developers are always striving to create the next Shazam or Talking Tom.  However, Borrell believes that the vast majority will not earn back their investment.

The report also predicts that Apple’s hold over the app market won’t last forever – especially with the increasing popularity of Google’s mobile operating system Android.

This echoes the views of Roy Greenslade – he suggests that Google might even launch a new high-quality tablet device to rival the iPad (which will, of course, be based on Android).  And new research from the Nielsen Company claims that Android users are more likely to click on ads within apps than people using alternative mobile operating systems.

In this week’s Mobile Fix, Simon Andrews also gives some stats based on a Nielsen report:

• 59% of smartphone owners and nearly 9% of feature phone owners report having downloaded a mobile app in the last 30 days.
• Searching application stores on their phones is the preferred way for discovering new apps for users of feature phones and smartphones alike (57% and 40%, respectively).
• 18% of all apps downloaders say ratings and reviews are “extremely important”, 36% say they are “very important”, and 34% say they are “somewhat important”.