Forecast: Mobile app revenues to top $35B in 2017, fueled by ad spending

Mobile application revenues will increase from less than $1 billion in 2009 to more than $35 billion in 2017, according to a new forecast issued by research firm Strategy Analytics.

Citing long ordering delays for Apple's (NASDAQ:AAPL) new iPhone 5 and iPad mini, Google (NASDAQ:GOOG) Android device activations in excess of 1 million per day, Microsoft's (NASDAQ:MSFT) new Windows Phone 8 and Research In Motion's (NASDAQ:RIMM) forthcoming BlackBerry 10, Strategy Analytics says the conditions are right for the mobile app ecosystem to experience dramatic growth in the months and years ahead.

Although the firm expects Apple and Google to combine to control more than 75 percent of app revenues five years from now, paid downloads--which generated close to 70 percent of revenues in 2009--will represent just 36 percent of the market by 2017. Instead, advertising will drive the majority of app revenues as early as next year, as companies dial up investment in in-app campaigns. Increased consumer interest in virtual goods and adoption of subscription-based business models will also fuel the app ecosystem's growth.

"The battle for developers is on and supporting recurring revenue streams is essential to gaining developer support," said Josh Martin, Strategy Analytics' director of apps research and FierceDeveloper contributor. "It is for this reason that Microsoft and Research In Motion are ensuring their new platforms support in-app purchase and subscription in addition to paid downloads and advertising at launch. They continue to battle for third place as the forecast shows Apple's and Google's app stores dominating revenue generation for developers throughout the forecast period."

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