ABI: Tablets Will Take A 35%, $8.8BN App Revenue Share This Year — Passing Smartphones By 2018

Despite being such a (relatively) new category of device tablets are racing up on their smaller cellular cousins, with rapidly growing user adoption and smartphone-surpassing web page traffic generation. Little wonder then that tablet apps are also generating increasing amounts of revenue — predicted to pass smartphone app revenue within five years.

Making a forecast in a new report, analyst ABI Research predicts tablets will account for more than a third (35%) of total app revenues this year, or some $8.8 billion out of a total pool of $25 billion. That’s still a way behind smartphones of course — projected to generate $16.4 billion this year, or just under double the amount generated by tablet apps — but the revenue share is growing and ABI reckons tablets will surpass smartphones in app revenue generation by 2018.

The reasons for tablets to become ultimate app revenue winners are down to their larger screen, which offers plenty of scope for developers to build attractive wares, and also lower cost slates helping to ramp up tablet ownership and increase app downloads, reckons ABI.

“The larger screen makes apps and content look and feel better, so there are more lucrative opportunities,” says senior analyst Aapo Markkanen in a statement. “One might think that the bigger installed base of smartphones would compensate for the disparity, but that notion fails to take into account the arrival of low-cost tablets, which hasn’t even started yet at its earnest. The smartphones paved the way for them, but in the end we believe that it’s the tablets that will prove the more transformative device segment of the two.”

The analyst adds that the tablet category is also well placed to open up the computing market by addressing underserved demographic groups such as the elderly and children. “The really big deal about tablets is how they will help to finally bring the computing age to, for instance, children and the elderly,” says Markkanen. “The business opportunity associated with them is undeniable, but at the same they can also bring about very significant social benefits.”

On the OS front, ABI predicts that the lion’s share of the app wealth this year will continue to be generated within Apple’s iOS ecosystem: it expects 65% of the combined $25 billion to come from iOS vs just over a quarter (27%) from Google’s Android ecosystem. While “the other mobile platforms” will generate the remaining 8% between them (ABI does not break this out).

Despite dominating app revenue, ABI recently predicted that Apple’s iOS will only account for 33% of the smartphone app downloads this year, vs. 58% being Android apps. However Apple’s tablet lead with its iPad devices continues to be a big one, with ABI expecting 75% of the tablet apps downloaded this year to be iPad apps, vs. just 17% being Android apps. Amazon (with its Kindle Fire tablet) is projected to get around 4% app share, while Windows tablets are relegated to around 2%.