Original URL: http://www.theregister.co.uk/2014/01/14/mobile_apps_not_financial_success/

Think your brilliant app idea will earn some big bucks? HAH. You fool

Beancounter estimates that fewer than 0.01% of apps will be a financial success

By Brid-Aine Parnell

Posted in Applications, 14th January 2014 08:28 GMT

Fewer than one in ten thousand mobile apps are actually going to make any money for their developers in the next couple of years, beancounters at Gartner have warned.

Both Google's Play Store and Apple's App Store have over a million apps and games available to download, forcing people to look at recommendations, social networks, ads or their friends to find new apps, rather than trawling through the thousands and thousands available.

Because of this, Gartner is predicting that less than 1 in 10,000 consumer apps will be a financial success.

That might not be the bad result it sounds like, however, since many apps aren't actually designed to make money by themselves - they're just meant to drive folks to companies' products. There are also more and more apps that are free to download, but make money after that by charging for purchases within the app.

"The vast number of mobile apps may imply that mobile is a new revenue stream that will bring riches to many," said Ken Dulaney, veep and analyst at Gartner.

"However, our analysis shows that most mobile applications are not generating profits and that many mobile apps are not designed to generate revenue, but rather are used to build brand recognition and product awareness or are just for fun.

"Application designers who do not recognise this may find profits elusive," he added.

On top of that, with so many free apps out there, developers have to come up with something pretty special to get anyone to part with their cash.

"There are so many applications that are free and that will never directly generate revenue. Gartner is forecasting that, by 2017, 94.5 per cent of downloads will be for free apps," said Dulaney.

"Furthermore, of paid applications, about 90 per cent are downloaded less than 500 times per day and make less than $1,250 a day. This is only going to get worse in the future when there will be even greater competition, especially in successful markets." ®