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Mobile Tech

After iPhone 5 Launch, It's All About the Apps

After iPhone 5 Launch, It
September 11, 2012 2:44PM

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"Increasingly it's being less about the hardware and more about what you can do with it, and that's apps. So that's probably one of Apple's strongest advantages going into this next cycle," said analyst Rob Enderle of Apple's iPhone 5. "Not only do they have a strong set of apps, the App Store is the best curated and it's the most profitable."

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Once again, the whole mobile technology world is seemingly speculating about Apple. From supposedly leaked Apple Mini photos to what we can expect from the iPhone 5 to Apple Radio and beyond, the speculation soon will be over. Apple is holding its big event Wednesday.

Beyond the hardware, though, there's plenty of focus on apps. Indeed, mobile-app marketing firm Fiksu said the iPhone 5 launch marks the beginning of a valuable opportunity for mobile app brands as millions of new device owners will start downloading.

"As we saw during last October's iPhone 4S introduction, the launch of a major device causes app downloads to peak and the costs to acquire loyal, repeat users to drop," said Micah Adler, CEO of Fiksu. "Brands can expect this marketing opportunity to start with tomorrow's launch event, pick up steam as the iPhone 5 hits the shelves mid-month, and extend throughout the rest of September and well into the fall. In fact, we're calling this 'Christmas in September' for mobile marketers."

Apps by the Numbers

Free apps will account for 89 percent of total downloads in 2012, according to Gartner. Worldwide mobile app store downloads will surpass 45.6 billion in 2012, with free downloads accounting for 40.1 billion, and paid-for downloads totaling 5 billion.

"In terms of the apps that consumers are buying, 90 percent of the paid-for downloads cost less than $3 each," said Sandy Shen, research director at Gartner. "Similar to free apps, lower-priced apps will drive the majority of downloads. Apps between 99 cents and $2.99 will account for 87.5 percent of paid-for downloads in 2012, and 96 percent by 2016."

Gartner expects Apple's iTunes App Store to have more than 21 billion downloads in 2012, which is an increase of 74 percent over 2011 and indicates continued strong demand for mobile-app content.

"Apple's market share is the largest, considering its App Store accounts for 25 percent of available apps in all stores," said Brian Blau, research director at Gartner. "The number of apps available is driven by an increasing number of stores in the market today that include platform owners, device vendors, communication service providers and others who want to offer core mobile-app services.

"These stores will see their combined share of total downloads increase, but demand for apps overall will still be dominated by Apple, Google and Microsoft."

Apple's Advantage

As the world waits for the big Apple news, Google isn't wasting any time touting a new YouTube app. Apple isn't supporting a native YouTube app on the next iPhone, so YouTube has worked up its own app for the iPhone and iPod touch.

Rob Enderle, principle analyst at the Enderle Group, told us for smartphones in Apple's class, it's all about the apps. And right now Apple has the best catalog of apps, which will help the brand as it continues to battle for market share.

"Increasingly it's being less about the hardware and more about what you can do with it, and that's apps. So that's probably one of Apple's strongest advantages going into this next cycle," Enderle said. "Not only do they have a strong set of apps, the App Store is the best curated and it's the most profitable. Those are three advantages that are going to be hard for anybody to beat."

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