The Yankee Group has nearly doubled its revenue estimates for the U.S. mobile apps market after increased smartphone penetration, more highly priced apps and the proliferation of app stores caused the research firm to reconsider its previous forecast.
Yankee Group now expects sales from mobile applications to reach $1.6 billion in 2010, up from its previous estimate of $537 million. The company expects app sales to reach a "whopping" $11 billion by 2014.
Analysts say the iPhone continues to be the most lucrative platform for developers because iPhone users download 60 apps per year, three times more than average users. However, the research firm found Google's Android platform has a good deal of growth potential.
"Apple's innovative one-click technology and AT&T's exclusive deal for the iPhone put them ahead for now," said Yankee Group Director Carl Howe in a statement. "But strong results from T-Mobile suggest that Android will be the next breakout smartphone app platform."
Howe found that paid applications are becoming increasingly popular; nearly a third of all apps downloaded today are purchased compared with just 18 percent a year ago. The average price of applications is also on the rise, with the average paid app costing $2.85 compared to $1.99 last year at this time.
Howe also reports that AT&T subscribers download 42 percent more apps, or 27 per year, than subscribers at other carriers. T-Mobile USA subscribers download about 18 apps per year.
Yankee Group said Verizon has the most paid apps, with nearly two-thirds of the apps downloaded by Verizon users paid.