According to Gartner Group, the size of the Mobile apps market will reach the US$29.5bn figure by 2013 up from US$4.2bn in 2009. This is very impressive taking into account that the market was basically born 3 years ago in 2007 with the introduction of the iPhone and the App Store. This astonishingly big new market is, by far, the largest and swiftest wealth and business opportunity creation in modern history, and a clear example of globalization.

Mobile apps Market Forecast - Gartner

Adam Smith would be proud of Steve Jobs.

It must be said that the figures forecasted by Gartner are not the only ones out of there, and market size differ from one research paper to another, being an “outrageously big market size” common ground for all of them. Whether they forecast US$18bn, US$15bn or US$20bn for the upcoming years is irrelevant to me. From my point of view, focusing on the figure itself would be an error, the important thing is the trend and the momentum.

Both of them are based on two basic variables, the ASP (Average Standard Price) per app and the market CAGR. I won’t go into details nor give figures for each one of these two parameters, I’ll do that in future posts. However, it must be said that, the ASP will show significant downward pressure due to increasing competition and a large number of entrants in the market, probably resulting in; a purge of companies not able to keep up with the up-stepping pace, the consolidation of those who’ve done their homework and have been able to adapt to the fiercely competitive market, and some surprises such as strongly coming up newly created development houses and individual or small team efforts. So the trend is a classic economic two curve system supply and demand like; INCREASING COMPETITION, DECREASING APP PRICES. Let’s keep in mind that a downward pressure in price should obviously spur the number of downloads per user with subsequent increasing price reduction pressure, creating a hyper-competitive loop as in every newly created market.

Tsunami's large Momentum

Additionally we’ll witness a huge market momentum.

This momentum would be properly appraised by calculating the CAGR (Compound annual growth rate) for either the volume of downloads or the monetary size of the market, but the final figure also is irrelevant to me. Honestly, c’mon, we’ve all seen internet startup projections look like hockey sticks in numbers of subscribers, users, etc, and its fine, the thing is that charts like that now portray the size of an entire market, and seeing that, I don’t need the CAGR! Its just visually so evident that this is exploding that there’s no need to go into the math. Momentum’s just outrageously strong. Let’s not forget that momentum, according to classical mechanics as formulated in Newton’s “Principia Mathematica” in the second of the Laws of Motion, is the result of mass and velocity, implying two parameters, direction and magnitude. In our case direction is UP, and magnitude is VERY BIG, like a Tsunami carrying a lot of water (mass) at a high speed.

At the end of the day the question that remains is, what will the apps market look like, both in size and volume if we were to compute forecasts for iPad and tablet app downloads together with smartphone apps? This question has a basic subjacent consideration when formulating it, for we have to take into account that everything indicates; a) ASP for iPad and future tablet apps is and will be significantly higher than mobile apps, b) the number of installed devices will probably grow faster than that of installed smartphones (everyone knows how to use a computer, whether a fully blown one, a notebook or a tablet) and the devices, both present and future, will be more versatile than smartphones c) the number of efforts to compete in that niche (market) will be significantly higher, let’s not forget its one of the main turfs where the future Universal Operating System game will be played, and d) I have a gut feeling

Just for fun we’ll take Einstein into account and his e=mc^2 and factoring-in the increasing mass (market size) and the kinetic energy implied in the momentum, this whole new business is going to grow at almost the speed of light, specially if we believe in the previous paragraph.

This is looking good and is going to look even better, and its fun and its going to be even more fun. I’ll keep you posted with my thoughts on it.