Analysis: 6.67 Billion App Downloads By 2014

Sure, Apple's App Store has surpassed 1.5 billion downloads. But that's just the beginning, according to an analysis of the smartphone market.

Frost & Sullivan released the analysis today, "An Insight into the U.S. Smartphone Application Storefront Market" and predicts downloads to smartphones from all app stores will hit 6.67 billion in 2014. That includes prepaid mobile, SMS and MMS, mobile Internet, iPhone, Android, Windows Mobile, Palm and Symbian.

One might wonder if Frost & Sullivan's prediction is a bit low, given that it took just a month for Apple's App Store to leap from 1 billion to 1.5 billion, and considering that more and more companies that make or provide service to smartphones are opening app stores - Palm and Verizon being recent examples. Frost & Sullivan Industry Analyst Vikrant Gandhi pointed to app stores open or in development from Google, Nokia and Microsoft as well.

At this point, much of the growth is due to free apps, Frost & Sullivan said. And that makes it difficult for companies to see a profit, which makes it difficult to determine how sustainable the stores would be in the long run. iTunes was already an online music store before it started being the conduit for the App Store, so it's a hard model to follow.

Whether people would download nearly as many apps if they weren't mostly free also is in question. Once most apps are downloaded, they're used a couple of times and then never or rarely touched again. It would stand to reason that paid apps probably get a bit more use over time, but if someone's going to pay enough for an app to make it profitable for the store, they're going to buy fewer of them.

These stores have to differentiate themselves from one another, he said, establishing "exclusivity agreements with application developers." The question is, he said, how much the various corporations will want to pump into starting app stores, or if they're going to want to outsource them and work with third parties to ensure they have apps available for the phones they service — much like video games are sold by stores not affiliated with the console producers.