Forecast: Apple's iOS 6 launch could boost App Store revenues to $5B
Apple (NASDAQ:AAPL) is poised to generate close to $5 billion in App Store revenues in 2012, galvanized by new iOS features like Maps and Passbook, according to a new IHS Screen Digest forecast.
Worldwide App Store revenues will reach $4.9 billion this year, up from $2.9 billion in 2011, IHS reports, adding that at the current rate of growth, Apple is on pace to command about 65 percent of the global app store market. The firm credits the expected growth to Apple's new in-house Maps platform, which replaces Google (NASDAQ:GOOG) Maps data, as well as Passbook, a virtual container for boarding passes, movie tickets, retailer loyalty cards and other documents.
Worldwide App Store revenues will reach $4.9 billion this year, up from $2.9 billion in 2011.
"Until now, Apple's iOS ecosystem has focused on virtual services, such as apps, digital music and movies," said Ian Fogg, senior principal analyst for mobile at IHS. "However, with iOS version 6, Apple is moving into real-world location and financial transaction features. The new Apple Maps and Passbook apps and accompanying location platform for app developers is the keystone for this real-world expansion, and will help support the accelerated growth of the Apple App Store market in 2012."
IHS contends that while Apple Maps may initially trail rival efforts from the likes of Google and Nokia, it will quickly gain traction thanks to features like turn-by-turn navigation, which should prove especially popular in the U.S., where motorists drive twice as much as their European counterparts.
Another positive sign for iOS 6's growth: Apple's efficient software upgrade process. The company will preload iOS 6 on its new iPhone 5, hitting retail Sept. 21, and Apple has already pushed an over-the-air iOS 6 update to legacy devices. As of June 2012, 80 percent of all iOS users had upgraded to Apple's then-current iOS 5: "We expect adoption of iOS 6 to be equally swift and pervasive," Fogg said. "This means that Apple's app developers have a much greater potential target market for Apps that use iOS 6's headline new features, such as the new Apple Maps location platform, Passbook and Facebook integration. Apple understands that to build a viable ecosystem, it needs to have a large audience of users on the most recent version of iOS. Apple has been, and will continue to be, successful at delivering that up-to-date installed base."
Beyond new software and features, Apple also maintains 435 million iTunes accounts linked directly to credit cards, up from 225 million in June 2011. The seamlessness of App Store purchases and in-app transactions bodes well for the storefront's continued financial growth.
"Apple is preparing to become not just a computer company or just a mobile hardware provider, but it seeks to be a key company in all parts of consumers' lives--from entertainment, communication and business, that is now expanding into real-world transactions for travel, entertainment events, daily deals and even retail," Fogg said. "iOS 6 heralds just the start of this journey. And while Apple's Maps solution may lag that of rivals initially, Apple still has all of the capabilities to win."
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