1) Mobile/Social/Local Combinations will Explode but will Generate Little RevenueAs we also recently noted, everyone is getting into mobile/social/local services these days from Facebook to Google and Amazon to Groupon. But Forrester says that while the number and usage of these services will increase, it does not expect the services to generate meaningful revenue in 2011. Also, in a side note, there's bad news for Foursquare buried in the report. Although Forrester doesn't name names, it says that "location-based social networks" will struggle as standalone activities as major players like Facebook integrate location into their services, like Facebook has done with Facebook Places.
2) 2011 is the Year of the "Dumb" Smartphone UserSmartphones will become more affordable, thanks to handset subsidies. And these new users will be less engaged and active than smartphone early adopters. Forrester expects they'll download fewer apps on average, but will consume more mobile media thanks to consumer education and convenience provided by the phones.
Despite the fact that these former "dumb phone" users may download fewer apps than early adopters, the overall app forecast is still good. In fact, Gartner also just released a report that stated mobile app store revenue will pass $15 billion in 2011. It said:
Worldwide mobile application store downloads are forecast to reach 17.7 billion downloads in 2011, a 117 percent increase from an estimated 8.2 billion downloads in 2010...By the end of 2014, Gartner forecast over 185 billion applications will have been downloaded from mobile app stores, since the launch of the first one in July 2008.(Note: The "dumb" reference in Forrester's trend title is not meant to a slight at the intelligence of these new users, by the way, but the phones they've upgraded from: feature phones, also sometimes called "dumb phones.")
Worldwide mobile application store revenue is projected to surpass $15.1 billion in 2011, both from end users buying applications and applications themselves generating advertising revenue for their developers. This is a 190 percent increase from 2010 revenue of $5.2 billion.