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The App Economy Will Be Worth $6 Trillion in Five Years (recode.net)

Posted by msmash on from the growing-affinity dept.

An anonymous reader shares a report: In five years, the app economy will be worth $6.3 trillion, up from $1.3 trillion last year, according to a report released today by app measurement company App Annie. What explains the growth? More people are spending more time and -- crucially -- more money in apps. While on average people aren't downloading many more apps, App Annie expects global app usership to nearly double to 6.3 billion people in the next five years while the time spent in apps will more than double. And, it expects the average app spend -- including app-store purchases, advertising spend and, most importantly, commerce -- to increase from $379 per person to $1,008 in 2021. The 800-pound -- or $6 trillion -- gorilla in the room is mobile commerce.

92 comments

  1. So... by Daetrin · · Score: 4, Funny

    Will that appy apps are apper appy app guy finally have something relevant to say in response to this?

    --
    This Space Intentionally Left Blank
    1. Re:So... by Anonymous Coward · · Score: 0

      He'll be too busy buying and selling Warren Buffett, Bill Gates, and the Walton family to bother posting anymore.

    2. Re:So... by Anonymous Coward · · Score: 0

      Will that appy apps are apper appy app guy finally have something relevant to say in response to this?

      Yo Dawg, I herd u like a Soviet Russia Appy App, so we put a Soviet Russia in yo Soviet Russia so you can Appy App while u Appy App.

  2. I still do not get spending much money on apps by natespizer · · Score: 2

    I can see a few here and there for functions you need or want but I can't see people spending 3x-10x more in apps in the future.

    1. Re:I still do not get spending much money on apps by painandgreed · · Score: 4, Informative

      I can see a few here and there for functions you need or want but I can't see people spending 3x-10x more in apps in the future.

      People, of businesses? We're having to start installing apps for work now, VPN apps, online conference apps, business apps for once we get the VPN app running, and even apps to replace those secure code dongles as everything is going towards two factor security. Personally, yes, I don't expect to spend any more on apps, even less as I have all I want. Work and other businesses however, seems to be spending more on such things and integrating them into the normal workflow.

    2. Re:I still do not get spending much money on apps by xxxJonBoyxxx · · Score: 1

      Me neither. My family and I have been though about a dozen cell phones in the past ten years and we still haven't felt compelled to buy an app or spend any money on "in app" purchases. Who, exactly, is parting with their money here?

    3. Re:I still do not get spending much money on apps by Anonymous Coward · · Score: 0

      Some people (whales) blow thousands of $$$ on a single freemium game. These 1%ers probably skew the average.

    4. Re:I still do not get spending much money on apps by Hognoxious · · Score: 2

      Hipsters & millenials.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    5. Re:I still do not get spending much money on apps by LesFerg · · Score: 1

      I have started using AliExpress, mainly because I can find items there which local retailers mark up the price anything from 5 to 15 times.
      Tho I think I do most of that on my desktop via the browser, I installed the phone app just out of curiosity. They have an interesting technique to inspire app use, with daily special discounts for app users only. I guess that could attract more app purchasing if the goods & prices are exceptional.

      Our government will try to mess this online shopping up by charging goods and import taxes, but even then the prices will remain a fraction of what the country's retailers are gouging us with. I don't see online shopping use declining anytime soon, so it's a reasonable bet that it may move away from browsers to specific apps on portable devices.

      --
      If I had a DeLorean... I would probably only drive it from time to time.
    6. Re:I still do not get spending much money on apps by mjwx · · Score: 1

      I can see a few here and there for functions you need or want but I can't see people spending 3x-10x more in apps in the future.

      I cant even see that. Quite a lot of apps these days are just poor copies of a web portal with a cut down feature set.

      And mobile devices are getting better and better at handling web content. I don't use my banks app because it's a pain in the backside, slower than the website and has half the features (including one I use regularly).

      I think that the app craze is going to wane. Apps are only for companies that cant produce a decent website. Of course the artilce is a marketing fluff piece for an app metrics company so of course they're never going to say that and instead say "Apps are the thing(TM) buy all our shit".

      --
      Calling someone a "hater" only means you can not rationally rebut their argument.
    7. Re:I still do not get spending much money on apps by Anonymous Coward · · Score: 0

      And mobile devices are getting better and better at handling web content. I don't use my banks app because it's a pain in the backside, slower than the website and has half the features (including one I use regularly).

      Enjoy it while you can. Eventually, they'll opt to streamline their user interface by simplifying the web portal to match the app portal. Because apps are the future.

  3. Only apps can app apps! by Anonymous Coward · · Score: 5, Funny

    Modern app appers app other apps using apps, NOT LUDDITE software!

    Apps!

    1. Re:Only apps can app apps! by avandesande · · Score: 1, Funny

      Mod up!

      --
      love is just extroverted narcissism
    2. Re:Only apps can app apps! by JonnyCalcutta · · Score: 4, Funny

      Hold on, I'm trying to find a mod app...

    3. Re:Only apps can app apps! by Anonymous Coward · · Score: 0

      Does anyone know of an app that allows me to have nothing to do with nobody?

    4. Re:Only apps can app apps! by DontBeAMoran · · Score: 1

      If you can't find any, try searching for an XM, IT or S3M app.

      --
      #DeleteFacebook
    5. Re:Only apps can app apps! by Areyoukiddingme · · Score: 1

      Modern app appers app other apps using apps, NOT LUDDITE software!

      Apps!

      A valiant effort, but it's just not the same. Only the original had that authentic unhinged feel, that certain je ne sais quoi only achievable by being so far around the bend, the bend isn't visible from there.

    6. Re:Only apps can app apps! by Anonymous Coward · · Score: 0

      Unfortunately, I just discovered Xmp isn't on F-Droid anymore.
      I guess you'll have to buy something from Google Play, but I assume it's less than $6 trillion.

    7. Re:Only apps can app apps! by LesFerg · · Score: 1

      You don't need an app for that, just delete that pesky kernel file.
      Hey, maybe we need an app for that!

      --
      If I had a DeLorean... I would probably only drive it from time to time.
  4. I can totally see this... by zifn4b · · Score: 1

    ...especially because of apps like NipAlert and SeeFood.

    --
    We'll make great pets
    1. Re:I can totally see this... by msmash · · Score: 2

      speaking of which, https://medium.com/@timanglade...

  5. Hey . . . by hduff · · Score: 3, Funny

    There's an app for that.

    --
    "I believe in Karma. That means I can do bad things to people all day long and I assume they deserve it." : Dogbert
  6. 6.3 billion is impossible by Anonymous Coward · · Score: 1

    Unless apps become available to the very poorest and also the people who don't want to use apps, over 90% of the world using apps is impossible.

    1. Re:6.3 billion is impossible by sl3xd · · Score: 1

      So is the notion that advertisers will somehow decide to spend 3x more for the same pair of eyeballs.

      I'm flattered, really, but advertisers already know the trash my eyes are used to seeing. They know I ain't picky, and spending 300% more to reach my eyeballs is a waste of money.

      --
      -- Sometimes you have to turn the lights off in order to see.
    2. Re:6.3 billion is impossible by tlhIngan · · Score: 1

      Unless apps become available to the very poorest and also the people who don't want to use apps, over 90% of the world using apps is impossible.

      Exactly. I can't figure out how they didn't even spot-check that number. Sure the number of people on earth has nearly doubled in the past 100 years or so, but that's more of a fluke. At 6.3B people, that's a good chunk of the population (over 7B) most of whom are not able to get a smartphone capable of running apps that support the app economy.

      It's not like the population of the earth is changing at such a rapid rate that it's unknowable. Just knowing it's over 7B means if your result is in the same magnitude as that means it's a big chunk of the population. Even if the last time you were told it's 5M (about 25 years ago) that's still something that makes you pause.

    3. Re:6.3 billion is impossible by Hognoxious · · Score: 1

      Sure the number of people on earth has nearly doubled in the past 100 years or so

      More like the past 50.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    4. Re: 6.3 billion is impossible by Anonymous Coward · · Score: 0

      How long until the world is overrun by jungle bunnies and muzzies?

    5. Re: 6.3 billion is impossible by Anonymous Coward · · Score: 0

      Negative 50 years.

    6. Re:6.3 billion is impossible by Anonymous Coward · · Score: 0

      is that mba math? gp is correct.

  7. Such a shame... by Gravis+Zero · · Score: 0, Offtopic

    that we don't have any money for healthcare because that would be "big government" but we have trillions for "apps". -_-

    --
    Anons need not reply. Questions end with a question mark.
    1. Re:Such a shame... by sl3xd · · Score: 1

      Well, maybe they're using healthcare logic:

      We already pay $60,000/year for the generic version of some drugs -- and those drugs were priced at $19k/year while they were still patent protected in 1997. It's insane, but yes, prices have gone up several hundred percent for an old and outdated drug. The market has reached the point where instead of trying to undercut the competition, a company will raise its prices to match the competitor's. And the same is true for surgeries, X-Ray's, hospital stays, doctor visits, etc.

      By that logic, we'll soon shovel over $10 to use an unmaintained app which cost $1 when it was released in 2007.

      --
      -- Sometimes you have to turn the lights off in order to see.
  8. *faaaart* by Mats+Svensson · · Score: 1

    Money, please!

  9. halp by fattmatt · · Score: 2

    I need to buy an app, can someone recommend one?

    1. Re:halp by angel'o'sphere · · Score: 1

      Yes,
      but it is the most expensive App I ever bought: ThaiDict. I think $39.00, not sure, could be only $25.00
      An awesome App to lean Thai, dictionary and phrase book.

      --
      Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
    2. Re:halp by Anonymous Coward · · Score: 0

      What happened? Did you go looking for some of that sweet, sweet ladyboy action, misspell ThaiDick and just decided to roll with it?

  10. And this stock is a sleeper! Invest now! by sl3xd · · Score: 2

    How is this different from any other article that amounts to vapid sensationalism?

    While there is definitely room to grow, it's not in markets which are already developed - North America & the EU, for example, have pretty high market penetration for 'apps' - to the point where many homeless in the US have phones with 'apps'.

    Expanding into high population areas like China (and the rest of Asia) will certainly help growth - but just because there are more users does not mean a poor farmer in China or India has the ability to pay the same amount of money as a poor farmer in the US or EU.

    --
    -- Sometimes you have to turn the lights off in order to see.
    1. Re:And this stock is a sleeper! Invest now! by Anonymous Coward · · Score: 0

      I do remember reading about chinese chat apps already having a large ecosystem with their own apps and services marketplace.

    2. Re:And this stock is a sleeper! Invest now! by Anonymous Coward · · Score: 0

      What you're missing, and what the writeup makes very difficult to understand, is that this include purchases made in apps like Lyft, Amazon, Amazon Prime, Uber, every kind of Video on Demand service, etcetera, etcetera, etcetera.

      This is only a tiny little bit about paying for apps. And only a medium bit about paying for bullshit "gold coins" in game apps. This is mostly about raw purchasing done through the phone rather than in person or on a laptop or desktop computer.

  11. I believe that there is no much gold here. by Anonymous Coward · · Score: 0

    Do you have $6 trillion transformed to gold?

    1. Re: I believe that there is no much gold here. by Anonymous Coward · · Score: 0

      I think the word you are looking for is transmuted. /s xD

  12. I still don't get it. by jawtheshark · · Score: 4, Interesting
    I still don't get it. Most applications I use are free, and even for some I don't see a need for an "App". Most of the time the mobile-aware (or responsive design) websites work just fine. Except the m.slashdot.org thing, I could probably write 10 bug reports just by thinking of it. Luckily, you can tell it to load the desktop site. For most stuff the mobile website is just fine. I even use Facebooks mobile site, because I ditched their app it after the split of their core app and messenger. Never looked back. Works wonderfully.

    How do you make money on apps? The only thing I can see, is selling your App-writing skills to a big company, which then distributes it for free to the end-user.

    I also don't like the word "app". What is wrong with "application" or "program"? Those words were just fine. *sigh* Now, get off my lawn!

    --
    Ahhh...the great dumpster continuum. Many a free computer will be found there. -- sowth (748135)
    1. Re: I still don't get it. by Anonymous Coward · · Score: 1

      What's wrong with "program?"
      By definition an application is many programs.

    2. Re:I still don't get it. by Anonymous Coward · · Score: 0

      I'm guessing they're counting purchases of goods and services in the total, so all of the purchases in every e-commerce site's app would get rolled in. Amazon, eBay, books, electronics, streaming video, event tickets, etc. And since a web browser is an app, you can just count all mobile commerce too. But why stop there, the line between phones/tablets/laptops is getting blurry, so that gets you all e-commerce. And you can pay your bills online, so that adds all of your other credit card purchases (gas, restaurants, groceries, etc.) plus your phone bill, rent/mortgage, taxes, etc. Everything that isn't cash can be considered part of the "app" economy, because why not? Appy app-app app app. Apps!

    3. Re:I still don't get it. by Tablizer · · Score: 1

      Most of the time the mobile-aware (or responsive design) websites work just fine. Except the m.slashdot.org thing, I could probably write 10 bug reports just by thinking of it

      Modern appdot appers appdot other appsdots using appdots, NOT LUDDITE software!

      --
      Table-ized A.I.
    4. Re:I still don't get it. by zifn4b · · Score: 4, Interesting

      I still don't get it. Most applications I use are free, and even for some I don't see a need for an "App". Most of the time the mobile-aware (or responsive design) websites work just fine. Except the m.slashdot.org thing, I could probably write 10 bug reports just by thinking of it. Luckily, you can tell it to load the desktop site. For most stuff the mobile website is just fine. I even use Facebooks mobile site, because I ditched their app it after the split of their core app and messenger. Never looked back. Works wonderfully.

      How do you make money on apps? The only thing I can see, is selling your App-writing skills to a big company, which then distributes it for free to the end-user.

      There are several ways to make money for mobile apps and games:

      • - Ads, many free games/apps have banner ads, full screen ads periodically. Some games are doing things like get this temporary boost if you watch a quick 30 second ad. It's quite clever.
      • - Pay 2 Win games - You'd be surprised how competitive some games are that have leader boards. Some people pour obscene amounts of money into the game just to get #1 and be like "Look at me!"
      • - Many mobile apps are very cheap usually <$5, many $0.99. This leads to eh, it's only $.99 big deal, CLICK!
      • - Some apps just get really popular socially and offer additional content to be purchased in the "free" version. Your friend is like "oh I have this and you don't". Since you don't have it, you buy that $.99 add-on content so you don't feel left out.

      There are a lot of revenue streams you can tap into with mobile apps if you know what you're doing. They might be relatively small but if you get enough users, it adds up. If none of these sound compelling to you, you're probably not in the target demographic. :)

      --
      We'll make great pets
    5. Re:I still don't get it. by Anonymous Coward · · Score: 0

      • - Ads, many free games/apps have banner ads, full screen ads periodically. Some games are doing things like get this temporary boost if you watch a quick 30 second ad. It's quite clever.

      Except most of those ads are for other apps, usually the same ad over and over. If there's any real money there, it's a bubble about to burst, just like web ads.

      • - Pay 2 Win games - You'd be surprised how competitive some games are that have leader boards. Some people pour obscene amounts of money into the game just to get #1 and be like "Look at me!"

      I've seen some games like that. Most other players either lose interest or stop looking at the leader board. You end up needing those hyper competitive players because nobody else is going to spend money on the game. Of course, I've seen games without them and those end up folding within a year or two because even when you can make it to the top of the leaderboard without spending lots of money, people still won't pay any money. So you're really just competing for a small number of compulsive players/gamblers.

      • - Many mobile apps are very cheap usually <$5, many $0.99. This leads to eh, it's only $.99 big deal, CLICK!

      If they're that stupid, then they'll eventually run out of money to spend on their phone bill and the problem solves itself.

      • - Some apps just get really popular socially and offer additional content to be purchased in the "free" version. Your friend is like "oh I have this and you don't". Since you don't have it, you buy that $.99 add-on content so you don't feel left out.

      App users are getting older and therefore more alone. So alone. That means those so-called "friends" can take their 99 cent apps and shove them. Real friends don't care if you have the latest trendy app.

    6. Re:I still don't get it. by zifn4b · · Score: 1

      I've seen some games like that. Most other players either lose interest or stop looking at the leader board. You end up needing those hyper competitive players because nobody else is going to spend money on the game. Of course, I've seen games without them and those end up folding within a year or two because even when you can make it to the top of the leaderboard without spending lots of money, people still won't pay any money. So you're really just competing for a small number of compulsive players/gamblers.

      Take a look at Star Trek Timelines. It's especially appropriate for the Slashdot crowd. In fact, I wonder if any of them will admit how much they spend publicly on the events. ;) Disruptor Beam has a cash cow.

      --
      We'll make great pets
    7. Re:I still don't get it. by Voyager529 · · Score: 1

      Take a look at Star Trek Timelines. It's especially appropriate for the Slashdot crowd. In fact, I wonder if any of them will admit how much they spend publicly on the events. ;) Disruptor Beam has a cash cow.

      I got hooked on it for a bit. It was kinda fun for a bit, and I'll admit I spent like $5 on some Dilithium Crystals, but I got to the point where it was near-impossible to do anything without massive amounts of grinding, I ended up getting all these obscure characters rather than anyone I wanted, and didn't feel there was enough value in buying more stuff - not the least of which was the fact that it's a game very clearly intended for larger screens than my Note 4, based solely on the amount of scrolling I had to do.

    8. Re:I still don't get it. by unixisc · · Score: 1

      That's what I was wondering. Almost all the apps I use are free (only one I ever purchased was Monopoly), and I never upgrade to the paid pro edition that many advertize. Usually, whatever limitations they build into the free ones, I live w/.

      I think the reason they call it app is that it's a lot more limited in functionality, often free/cheap, and can quickly be installed/uninstalled. An application, by contrast, like Microsoft Office or Autocad or Adobe Suite costs quite a bit of money and often comes in multiple DVDs or a USB drive, and takes a while to install/uninstall. Very often, the apps are just extracts of websites, w/ the browser itself removed. Like one could go to wellsfargo.com on one's laptop browser, or one could open up the Wells Fargo app on a phone or tablet. That's the equivalence in terms of functionality.

    9. Re:I still don't get it. by Anonymous Coward · · Score: 0

      When you install a "free" app you will give it control over some data. That data then goes to the company who made the app and then they sell it.

    10. Re:I still don't get it. by Anonymous Coward · · Score: 0

      I got hooked on it for a bit. It was kinda fun for a bit, and I'll admit I spent like $5 on some Dilithium Crystals, but I got to the point where it was near-impossible to do anything without massive amounts of grinding

      You've pretty well described the pay-to-win model: design a game that is balanced for fun at the beginning long enough to get the player into it, and then slowly switch to a balance where the game is just boring grinding... with the catch that you can pay real money to get it back to the fun pacing. That's why I try to avoid games with any pay-to-win options: the only way they can be profitable is by intentionally making a bad game and "fixing" it with pay features.

    11. Re:I still don't get it. by Anonymous Coward · · Score: 0

      9 out of 10 applications making money in Apple's and Google's walled gardens are control by the same seven corporations. Just about all of the money is going to the same people.

    12. Re:I still don't get it. by goose-incarnated · · Score: 1

      That's what I was wondering. Almost all the apps I use are free (only one I ever purchased was Monopoly), and I never upgrade to the paid pro edition that many advertize. Usually, whatever limitations they build into the free ones, I live w/.

      Same here. The only app I have ever paid for was Words with Friends. I don't even remember how much it was, TBH, but it was low enough that I did not feel like I have to put up with advertising.

      --
      I'm a minority race. Save your vitriol for white people.
    13. Re:I still don't get it. by geekmux · · Score: 1

      I still don't get it. Most applications I use are free, and even for some I don't see a need for an "App". Most of the time the mobile-aware (or responsive design) websites work just fine. Except the m.slashdot.org thing, I could probably write 10 bug reports just by thinking of it. Luckily, you can tell it to load the desktop site. For most stuff the mobile website is just fine. I even use Facebooks mobile site, because I ditched their app it after the split of their core app and messenger. Never looked back. Works wonderfully.

      How do you make money on apps? The only thing I can see, is selling your App-writing skills to a big company, which then distributes it for free to the end-user.

      There are several ways to make money for mobile apps and games...

      There are also several ways to sell statistics based on bullshit too.

      Look at a Nest webcam cloud service. A consumer pays $10/month for that, and can easily access it through a browser, but when a consumer uses the magical bean (a.k.a. "app") to access the service, it's counted as magical bean revenue.

      In summary, magical beans are worth trillions.

    14. Re:I still don't get it. by zifn4b · · Score: 1

      but I got to the point where it was near-impossible to do anything without massive amounts of grinding

      That's key. If you don't like grinding you won't like a TON of games. You won't like World of Warcraft or any MMO really, you won't like Pokemon, Final Fantasy or JRPG's. You won't like Rogue-like's most likely either. Tons of games have a grinding component. Like I said, we need someone who is in the target demographic to speak to this and they probably won't because well it's probably embarrassing. :D

      --
      We'll make great pets
    15. Re:I still don't get it. by zifn4b · · Score: 1

      You've pretty well described the pay-to-win model: design a game that is balanced for fun at the beginning long enough to get the player into it, and then slowly switch to a balance where the game is just boring grinding

      Have you heard of Pokemon? This description goes well beyond the bounds of pay2win and existed long before the pay2win model existed. We can even go back to the days of the Apple IIe and C64 to see some real hardcore grinding like Might & Magic, Wizardry, Ultima, Bard's Tale and so forth. In those games, you had to take risks and might die over and over again and get set back while you were trying to grind. I'd love to see some of the gamers today try to play those games. They would probably just throw their devices out the window out of frustration. :) But you see... those of us that were persistent got to feel very satisfied about their achievements.

      --
      We'll make great pets
    16. Re:I still don't get it. by Anonymous Coward · · Score: 0

      But you see... those of us that were persistent got to feel very satisfied about their achievements.

      And also a certificate in the mail that we don't dare show anyone.

  13. Apps are for Cows by Anonymous Coward · · Score: 0

    Apps are for Cows! Mooooo, moooo, moooooo say the appy app Cows!!

    1. Re:Apps are for Cows by Tablizer · · Score: 1

      Apps are for Cows! Mooooo...say the appy app Cows!!

      There's an app for that: http://www.app-cow.com/

      --
      Table-ized A.I.
  14. Does not add up. by Anonymous Coward · · Score: 0

    Assuming everyone on earth is buying "apps" (whatever those are), then according to this, every human in existence will be spending $900 per year on "apps".

    A month's wages on "apps"? Sorry. Not going to happen.

    1. Re:Does not add up. by Hognoxious · · Score: 1

      Seconded. It's like the story that there'll be 27 trillion twitter accounts by next Wednesday.

      I propose a rule: before suggesting that "the market for foo will be X" ... or "there will be Y number of bar", divide it by 7 billion. Then ask yourself if you can reasonably imagine one person buying/eating/having that quantity.

      There should be a name for this. Malthus' quotient?

      P.S. The speilchucker suggested Maltese or Maltose. Does anyone know of one for Firefox that has a vocabulary better than a typical nine-year-old?

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    2. Re:Does not add up. by Anonymous Coward · · Score: 1

      Maybe the author of the article got married today

    3. Re:Does not add up. by Tx · · Score: 1

      If they're just counting money spent on buying apps, then I'm 100% with you.

      If they're also counting in-app purchases and money spent via apps, then it could add up. Think people ordering fast food, buying stuff from Amazon and eBay, Uber rides etc etc.

      And a quick look at the article; "And, it expects the average app spend — including app-store purchases, advertising spend and, most importantly, commerce — to increase from $379 per person to $1,008 in 2021." So they are indeed counting those things, that's "commerce". So it's not so crazy at all; we're mostly talking about money people already spend, only they'll increasingly be buying the same products and services through apps rather than traditional means, that's all.

      --
      Oh no... it's the future.
    4. Re:Does not add up. by Anonymous Coward · · Score: 0

      If I use an "app" to order something from Amazon, that is not "app" economy. It is just plain economy.

      Besides, Apple does not allow "apps" that are just an alternate interface to your website (unless you are one of the big guys like Amazon or Facebook - the rest of us have to follow the rules).

      However, if I use an "app" to buy virtual goods that are only useful within the "app", then that is "app" economy.

      Still, 6.3 billion people spending $900/yr each is a ridiculous overestimate. I'd put it at $9/yr at most.

    5. Re:Does not add up. by LostMyBeaver · · Score: 2

      I agree with you wholeheartedly. But the people publishing the article isn't measuring based on those measurement. They are measuring the market not based on how much product is bought and sold. They are measuring two possible things.

      1) The market cap value... meaning that how much are the idiots who actually need help from a guy in a blue shirt to logon to his iTune account willing to gamble on the stock market. Consider that the companies making apps and the stocks are totally unrelated, we've moved past gambling on company performance and things like sales and now gamble on whether the stock will go up or down. Yes that's right. Stocks have nothing meaningful to do with a company. Instead, it's about someone making enough noise to generation trading volume which will naturally make the stock go up or down. Those e-mails that go out with stock tips (spam) actually are far more effective at making shares go up or down than CEOs today. Write a script which will buy and sell $10 worth of a share once a minute based only on those e-mails and you can actually be a REALLY successful trader these days. It's because it works more often than it doesn't. Because those idiots are using market manipulation to drive the share value up. And it works... but sadly, it also increases the cost of a loaf of bread and liter of milk far faster than salaries increase.

      2) Trickle effect. So, Company A sells 10 million copies of a game for $10 million and that company pays employees, rent, etc... and the local businesses strengthen and receive $5 million (after all the taxes) of that $10 million etc... Then those businesses spend that money and it's $4 million after taxes (lower tax brackets) etc... So the same $10 million was spent 15 times as a direct result of the original $10 million. Also add that during bank transfers of the money, no real money exchanges and there's math to create more money as it goes along... creating more wealth... and making $7/hour worth even less.

    6. Re:Does not add up. by Anonymous Coward · · Score: 1

      It is crazy. If my bank has an app that allows me to pay my mortgage through it, my house isn't being paid for with app money. We didn't have a special "telephone economy" when people called in mail order purchases. We didn't have a special "mobile browser economy" when e-commerce sites rolled out mobile browsers. The only major shifts were mail order, which removed the need for physical contact, and e-commerce, which broke from the physical catalog interface (electronic ordering was just an incremental upgrade of the mail order model). Everything since then is just rearranging the deck chairs. If eBay/Amazon/etc. didn't have apps, people would just use the mobile browsers interface or the desktop browser interface. It's like faxing in an order from a catalog vs. calling it in; slightly different interface, no functional difference. There's no more money being made, no opportunity for some upstart like Amazon to come in and change the marketplace. You can count the upstarts as part of the app economy, but not the existing business getting shifted to a spiffy new interface. My bank account doesn't magically become app money when I install the bank's app.

  15. All of this is predicated on the internet working by Anonymous Coward · · Score: 0

    Good luck with that.

  16. Reminds me of the late 1990s by DatbeDank · · Score: 2

    No, the app "economy" won't be worth nearly that much. If anything, we can expect a downturn sometime in the next few years to trim the excess bloat in a similar fashion to the dotcom bubble. On an unrelated side note, the Amazon Wholefoods merger is the AOL Time Warner merger of this decade.

    1. Re:Reminds me of the late 1990s by Anonymous Coward · · Score: 0

      Amazon is in a far better market position than AOL ever was. The AOL merger happened just as dial-up was about to take major hit. Christ, Time Warner owned a cable company that no doubt saw major growth in internet usage.

      So far, there is no major threat to Amazon. They have their hands in enough pies they can probably survive a market shift in any one area. Acquiring Whole Foods makes at least some sense since they already have Amazon Fresh. Hell, it'll probably be used to expand the service.

      Amazon is big enough it could sell off portions of its business and remain functioning. I don't think that ever applied to AOL.

    2. Re:Reminds me of the late 1990s by avandesande · · Score: 1

      I think whole foods represents AOL in this comparison

      --
      love is just extroverted narcissism
  17. P/E 12 by Anonymous Coward · · Score: 0

    My college accounting class was taught by a semi retired former fortune 1000 CFO. He said, and proved with data that a PE of 12 or less is a healthy but point and a p/e of 14 or more is sell territory.

    Tech stocks are so over inflated I wouldn't spend my enemies money on them.

  18. ... and... Zero in Ten Years by Anonymous Coward · · Score: 0

    Might make the dot-com bubble burst look like a picnic.

  19. Resist bad ideas by Tablizer · · Score: 1

    Apps are stupid. Most the same can be done through regular web pages (http/html/dom/js). Improve the bookmarking and perhaps page caching options* if they want web sites/services to act like apps, but otherwise installing software is 1990's, and a security risk.

    * Allow a page to check with the server to see if a newer version exists, otherwise cache the page and JS libraries for up to say a week for quicker access. And allow the user to set the upper limit of cache size and time per site so that greedy sites cannot hog too much cache. The defaults should be relatively low. If you are using fat libraries, you are doing it wrong.

    --
    Table-ized A.I.
    1. Re:Resist bad ideas by tlhIngan · · Score: 1

      Apps are stupid. Most the same can be done through regular web pages (http/html/dom/js). Improve the bookmarking and perhaps page caching options* if they want web sites/services to act like apps, but otherwise installing software is 1990's, and a security risk.

      But then you run into people who want apps because they oppose DRM and things like EME in browsers so you can avoid using apps because the web should be free of such stuff.

      And people who want half the stuff out of HTML5 because why does HTML5 need access to sensors and cameras and GPS and touch screens so you can implement apps as web apps without needing apps.

      You can't win.

    2. Re:Resist bad ideas by Tablizer · · Score: 1

      Subscription videos and music are arguably a reason to have installed apps, and maybe highly intensive graphics, such as 3D games. There is a place for installed apps, I won't dispute that, but a pizza-ordering app? Come on!

      And I see no problem with websites having access to local cameras, sensors, etc. IF the user explicitly grants them. A site can request access to local resources, and the user could see an inventory of requested services with approval check-boxes, and maybe a "more info" to explain in detail why a specific service is requested. If you deny some, hopefully the app will work "good enough" without them if they are not a key data item.

      --
      Table-ized A.I.
    3. Re:Resist bad ideas by 101percent · · Score: 1

      You're right. App store is actually 75% games.

    4. Re:Resist bad ideas by Tablizer · · Score: 1

      Well, perhaps; I don't play phone games so wouldn't know that market.

      --
      Table-ized A.I.
  20. Ransomware by Anonymous Coward · · Score: 0

    Is ransomeware an app? I could see that hitting the lofty numbers stated above at current infection rates. Lol.

  21. Stupid by nospam007 · · Score: 3, Insightful

    I guess they count people buying stuff on Amazon and AliExpress as 'in app purchases'.

    1. Re:Stupid by mhkohne · · Score: 1

      Perhaps. Without having read the report, I just assume they've taken the data they have and drawn a straight line through it.

      --
      A thousand pounds of wood moving at 300 feet per minute. Don't get in the way.
  22. I had no idea... by BadTuna · · Score: 1

    .. usage was even close to those numbers.
    I use zero now and don't see a need coming in the next five years.

    --
    Your sig here!
    1. Re:I had no idea... by Anonymous Coward · · Score: 0

      Yes, every starving child in Africa has an iPhone 6s and spends $900 USD per year on virtual goods in "apps". That is why they are starving!

  23. Laziness! by antdude · · Score: 1

    Ever notice people are so lazy to say the whole words like Phil, Tim, Al, Liz, Matt, pee, poop, doc, TV, Steve, Josh, Dave, etc.? These days, people type like "How r u?" :P

    --
    Ant(Dude) @ Quality Foraged Links (AQFL.net) & The Ant Farm (antfarm.ma.cx / antfarm.home.dhs.org).
  24. Or could it be ... by WoodstockJeff · · Score: 1

    ... that in 5 years, $6.3 trillion dollars will only be worth what $1.3 trillion is worth now?

  25. It's only the big companies by Anonymous Coward · · Score: 0

    That make all the money. The app/ play store favors their apps on the front page and basically the little guy gets no exposure and ends up like this
    There's no money to be had here unless you are big or very lucky. To make any money on ads your audience has to be ridiculously large which requires a massive advertising budget or winning the viral lotto.

    1. Re:It's only the big companies by Anonymous Coward · · Score: 0

      this^
      Mod parent up

  26. not worth by enrique556 · · Score: 1

    I think when they said "worth" they meant "valued at". The combined worth of apps to the global economy is in the negative.

  27. $6E+12 of churn by karlandtanya · · Score: 1

    Some software actually helps produce, but 6 trillion bucks worth of apps is gonna hard to justify as "worth" anything near that.
    A bunch of vigorous activity, but doesn't actually produce any beef...shoes...steel...tires...tortillas...whatever.

    funny money.

    --
    "Reality is that which, when you stop believing in it, doesn't go away." - Philip K. Dick
  28. App Economy? by rsilvergun · · Score: 1

    folks aren't spending $6 trillion on Pokemon Go. I'm guessing they mean Uber and the like. That's not the App Economy. That's the 21st century equivalent to sharecropping, the company store, or whatever other abusive employee-employer relationship you care to name. Using folks weak understanding of technology to get away with skirting minimum wage and benefits laws is not an economy.

    --
    Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
  29. Cellphones are toys by Anonymous Coward · · Score: 0

    You can't even download solely security updates for most "apps." Usually, updates are encrusted with feature changes or permissions changes.

    Until THAT changes, like many people I'll keep using my phone as something secondary to a true computer, and consider it a toy that is only ever nominally useful. And keep using very, very few apps.

  30. Bullshit Valuations and Browsers by geekmux · · Score: 1

    I accept a multi-trillion dollar valuation about as well as the average Shark Tank investor.

    Netflix offers an app. Is Netflix revenue based on app usage counted as "app" revenue, but not counted when a browser interface is used? How about Amazon? Nest? Your local grocery store app?

    This entire valuation is utter bullshit. I could do the same thing and claim the Chrome browser market is now worth trillions because it happens to be a popular interface for people to buy things with and create revenue.