When we look back on 2011, what will we remember about the mobile world?
1. Virtual goods will continue to fly off virtual shelves
Developers will continue to employ in-app purchase strategies as part of their freemium business model. No longer is simply offering a “lite” version of a $0.99 app, and then hoping to convert them, the only way to monetize. Already one-third of the Top 100 Grossing iPhone apps are free which shows how much success some developers are already having by going the route of virtual goods. And if you were wondering how large the market for virtual goods will be, Inside Network estimates that the virtual goods market will eclipse $2 billion in 2011. Although much of this will be attributed to games played online, it’s no secret that the mobile world is catching up.
And because of this…
2. At the end of 2011, less than 1% of apps in the App Store will be Paid
As the market for virtual goods continues to expand, Paid Apps will become more rare. Developers and publishers are realizing that user’s appetites for virtual goods is strong and plan on making this a increasingly important part of their monetization strategy going forward. A good example of this is Tap Tap Revenge 4, which is one of the 20 highest grossing iPhone apps of 2010, yet free in the App Store. They get users to open up their wallets by enticing them to purchase premium songs and avatar customizations.
Bonus: Keep your eye out for more branded in-app virtual goods. Early estimates are predicting that this will be a $150 million market in just a few short years. We expect 2011 to kick off this trend for mobile.
3. Apps will be downloaded by the truckload
App downloads will total more than 25 billion in 2011 according to the folks at “ID ” C. Let me repeat…25 billion. This speaks volumes about user’s appetites for apps, but it’s also very telling about the direction of the handset industry. This explosive growth is due in part to the proliferation of smartphones – devices capable of handling these powerful mobile apps. In fact, Nielsen projects that smartphones will overtake feature phones in 2011. More smartphones = more app downloads.
Bonus: Seasonal spikes in downloads will continue as more and more publishers see holidays as another way to update their offerings and vary their monetization strategies.
4. Everyone wants to be an Ansel Adams
2010 was the year of the “check-in.” Foursquare and Gowalla ushered a new buzz word into the social media lexicon. Part game (I’m the Mayor of my local pub!), part discovery- engine (free appetizer to anyone that checks in today!) and part notification system (where are my friends right now?), checking-in gave mobile users the ability tell the world exactly where they were at any given time.
In 2011, everyone is going to become a photographer. Apps like Instagram and PicPlz allow users to document their daily lives with snapshots. Filters and special effects gussy up casual pics to make them unique, while Facebook and Foursquare connectivity keeps everyone in the loop. There even an app (Foodspotting) to show exactly what you’re eating. Look ‘Ma, I’m gorging on a 72oz. steak!
Bonus: Watch out for more video sharing as well. Path just upped their game by allowing users to share 10-second video clips with friends and family.
5. Wallet? Who needs a wallet?
The digital wallet has been on the minds of techies for ages, and why not? The idea that you never have to pull out a piece of plastic to make a purchase sure does sound appealing. 2011 is the year we start to see these ideas become reality. Google has introduced Near Field Communication with their newest Nexus S phone which allows the wireless exchange of information between devices. Train travelers in Japan have already started using this sort of technology.
So will it finally become mainstream? Well, I think it’s safe to say most people will still be swiping cards this time next year, but for us technophiles, we think you’ll start to see some opportunities to whip an iPhone instead of your AMEX Black Card.
Bonus: The New England Patriots win the Super Bowl!
I know, I know, I’m biased. Being a native New Englander, I can’t help but pick the Pats to hoist the Lombardi Trophy come February. With home field advantage and Tom Brady looking like he’ll snag yet another MVP award, what’s not to like?
Have a happy and safe New Year. We look forward to seeing everyone again in 2011!
Evangelist – Apsalar, Inc.