The best things in life are free and the same can be said for applications, with the latest research from market research firm Gartner revealing that free apps will account for 89% of the total downloads made by mobile device users during 2012.

According to Gartner, worldwide mobile app store downloads will surpass 45.6 billion this year  with free downloads accounting for 40.1 billion of that total, whilst paid-for application downloads will amount to around five billion.

When it comes to the paid-for applications, Sandy Shen, research director at Gartner said that 90% of the paid apps cost less than $3 (around R24.50) each. Shen added that just like free applications, lower-priced apps will drive the majority of app downloads. This, as apps between 99 c (approximately R8) and $2.99 (about R24) will account for 87.5% of paid-for downloads this year, and a whopping 96% by 2016.

Apple’s App Store is the largest

Gartner expects Apple’s App Store to have more than 21 billion downloads in 2012, which is an increase of 74% compared to 2011 and indicates continued high demand for mobile app content.

The market research company stated that beyond the few major application stores from global operating system (OS) vendors the likes of Apple’s App Store, Google’s Play Store and Microsoft’s Windows Phone Marketplace, there are also stores from third parties that attract users with their brands or take advantage of the lack of dominant players in some markets.

Some of these third party stores include Amazon, which Shen says appealed to mobile users with its strong brand, global presence as well as an excellent selection of high quality content.  

Facebook’s recently launched App Center that sports support for mobile devices as well as  desktop PCs, will also become a prominent competitor, Gartner stated. This is due to its strong brand and leading position in social networking as well as social gaming.

The in-app purchase model works

Gartner said that utilising an in-app purchase business model is a lot more effective when it comes to converting casual app users into paying customers. Companies are further able to retain these clients via good user experiences as well as continued app updates.

This is a different approach from upfront payment where users pay for and then download apps. Users may be disappointed by this experience and then decide to never download an app from the developer who published it to the app store.

In-app purchasing opens the door to a recurring revenue stream for developers, but app performance and design will always be the most crucial ingredients when attracting new users and retaining these customers.

Table: Gartner

“Apple’s market share is the largest, considering its App Store accounts for 25% of available apps in all stores,” said Brian Blau, research director at Gartner. “The number of apps available is driven by an increasing number of stores in the market today that include platform owners, device vendors, communication service providers (CSPs) and others who want to offer core mobile app services. These stores will see their combined share of total downloads increase, but demand for apps overall will still be dominated by Apple, Google and Microsoft.”

In related news, Gartner also recently analysed the state of the global mobile phone market during Q2 2012. The company stated that worldwide mobile phone sales to end users amounted to 419 million units during the second quarter, with smartphone sales accounting for 36.7% of total mobile phone sales.