Mobile Apps To Hit $25 Billion By 2014

Handset makers will receive the bulk of the revenue selling apps to smartphones, but carriers have an opportunity to bring app stores to entry-level and feature phones.

The 1 billionth iPhone app
(Click for larger image and to see two more pictures of the app.)

Thanks to the growth of smartphones, mobile applications will generate more than $25 billion in direct and indirect revenue by 2014, according to a study released Tuesday by Juniper Research.

Mobile applications have been around for years from the likes of MobiHand and Handango, but Apple's App Store for the iPhone and iPod Touch really brought them to the forefront. Apple's store has been an unprecedented hit since its release last year, and it recently logged its 1 billionth download.

The success has not gone unnoticed by its competitors, as Android, Research In Motion, Microsoft, and Nokia are all implementing similar stores to provide its customers with over-the-air access to mobile apps. But these stores are almost exclusively aimed at smartphone users, and the report said there could be a large market for delivering apps to entry-level handsets and feature phones.

That's where the cellular carriers can step in to earn some additional revenue, the report said, and AT&T, Verizon, T-Mobile, and Sprint Nextel have the ability to offer on-deck app stores. The carriers will also see additional revenue from the increased use of mobile data, but it will require the mobile operators to adopt a more open attitude, the report said.

"Data revenue growth is dependent upon operators embracing policies which enable open access -- a policy which also involves facilitating app stores which compete with their on-portal offerings," report's author, Dr. Windsor Holden, said in a statement.

Apple keeps 30% of the revenue from apps sold in its store, and it's unclear if AT&T gets any cut of that revenue. Other apps store providers have clearly said a portion of revenue kept from sold apps will go directly to the carriers.

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