Put on your Google Glass. What can you see? No advertising, at least not from anyone except Google. Probably precious few apps, either, I’d imagine, since Google has announced some “interesting” rules for developers – you can’t charge for Glass apps, and you can’t include advertising. So at the moment (and admittedly this is beta launch) there’s no way for anyone (except Google of course) to make money. So there’s no incentive for developers to create anything for a device which, with this set of rules, becomes a de facto closed garden. Quite the opposite of Google’s usual open philosophy.

Since this is still a beta there is of course scope for those rules to change in future. If/when it does change, then developers may receive a return on their investment, and at that point we may see a good selection of quality apps emerge. Until that point, there will emerge some apps, but they are going to be little more than case studies, interesting but underdeveloped ideas. Glass also links up with the smartphone, a platform on which developers can charge for apps. So in all likelihood the best apps for Glass are going to be extensions of smartphone apps; putting in front of your eyes information you would otherwise have to glance down at your smartphone to see. While this gives imaginative developers a chance at differentiation, the lack of any financial returns is likely to see the focus remain on the phone and not on the Glass.

Will a few underdeveloped ideas and smartphone app extensions be enough to drive a market for an entirely new product category? The device is already causing enough controversy, can it achieve success without a bunch of killer apps as well?

The app market continues to grow. In the last year virtual goods and subscription business models have joined paid downloads and advertising as critical revenue drivers for the ecosystem. In fact, the app market will exceed $35B thru 2017 as seen in the chart below as the ecosystem is fueled by new business models, broader device penetration, and continued consumer interest in apps.

Some key findings from our forecast:

• More than 350B downloads from 2008 - 2017
• Revenue from apps will exceed $35B by 2017
• The Apple app store and Google Play will account for most of the revenue developers earn during the forecast period
• Paid downloads begin to decline in 2014 and lose their dominance as a % of the total revenue stream during the forecast period

In order to provide the granular data our clients expect we have re-vamped our apps forecast - improved the methodology - and will now be publishing several models - each broken down by storefront (ie BlackBerry App World) and device type (ie Tablet). The forecast has also been extended to 2017. The models include:

1. Revenue Forecast. This model will provide the revenue earned frome each revenue stream (paid downloads, in-app advertising, virtual goods sales, and subscription) as well as market share data for each of the storefronts (i.e. Google Play, Amazon, etc.)
2. Downloads Forecast. This model provides the number of free and paid apps for each of the storefronts, download ASP, market share data, and revenue from paid downloads
3. Virtual Goods Forecast. This model provides insight into the number of VG transactions per platform, ASP of virtual goods, and revenue from virtual goods
4. In-App Advertising Forecast. This model provides a view of the number of impressions for each platform, the CPM for these impressions, and the total revenue generated by in-app advertising
5. Subscription Revenue. This model provides the number of active subscriptions, the ASP of each subscription, and the total revenue generated by subscriptions
6. Category Forecast. Leveraging data from our AppTRAX database we will provide a look at the number of free and paid downloads per category for several storefronts as well as download revenue

Overall, these new models will provide clients with unprecedented insight into the apps market. The Strategy Analytics Report Mobile App Revenue Forecast 2008 - 2017 has already been published and is avalable for App Ecosystem Opportunity clients. The remaining models will be published throughout November.

For further information on the forecasts please e-mail JMartin@strategyanalytics.com.

You know what's cooler than 25 billion downloads? A trillion downloads.

Last weekend, Apple announced its App Store had surpassed 25 billion downloads. Just a few days later Apple is preparing to unveil the iPad 3 - possibly known as the iPad HD - depending on which rumor mongering site you choose to believe. Regardless of the moniker the new device is enshrined with one thing is clear - Apple is dominating the apps market. It's app store has more than 600,000 apps. It's growing 3% or more each month. Apple earns the lions share of paid download revenue in our most recent apps forecast buoyed by the success of the iPad, the continued interest in the iPhone, and the ability to charge a premium for tablet apps. But despite its strong market position the possibility of reaching a trillion downloads remains slim. Why?

The case against reaching 1 Trillion downloads:

1. Universal apps limiting the need to download the same app (think Angry Birds and Angry Birds HD) for each device you own it on instead one app can be used on multiple devices within an ecosystem (such as Infinity Blade)

2. HTML5 might be small potatoes today but in the future developers will begin to experiment with distirbuting HTML5 apps outside OEM app stores. HTML5 may not represent a significant part of the market but it could pull enough downloads away from OEMs to prevent them from reachin 1 trillion

3. Facebook will become an increasingly important app distribution platform - as seen by its announcements at CES - and could lead the next wave in app distribution short circuiting the volume needed to reach 1 trillion (although Facebook itself one day could view for 1 trillion downloads)

For more in-depth analysis about the case against Apple, the case for Apple (and others) reaching 1 trillion downloads, and the impact such a milestone would have on the industry see the Strategy Analytics Insight; You know what cooler than a billion? A trillion.

Mobile World Congress recently concluded but despite the show ending, the impact of the announcements have only begun to have an impact on the apps market. In fact, the announcements at MWC will shape ecosystem battles, competition within an ecosystem, and see new threats emerge. The impact of these events are discussed in the recent Strategy Analytics Insight; Mobile World Congress 2012: New threats emerge as Apps competition gets fierce.

The biggest stories at MWC included:

Ecosystem Differentiation

• Apple casting a shadow over Google's press conference by inviting the press to the launch of the iPad 3
• Microsoft redefining the PC-mobile app relationship with the launch of Windows 8 Consumer Preview

Intra-Ecosystem Differentiation

• Nokia launching more of its own branded apps and hardware - the 41MP Pureview - that will set it apart from other Windows Phone players (if/when the technology comes to the Lumia product line)
• Samsung leveraging the S-Pen to offer a differentiated experience to users and developers

New Competition Emerging

• Opera launching a new App Store to take advantage of its large user base
• Facebook quietly become a key plaey in app distribution

To understand how these and other stories will shape the future of the apps ecosystem see the insight; Mobile World Congress 2012: New threats emerge as Apps competition gets fierce.

Barnes and Noble and Amazon. Their epic battle for book supremacy dates back to a century long past. It was a simpler time - 1995. Back in the '90's (as we called them back then) the battle between the established B&N and the upstart Amazon.com was about books. But today, more than 15 years after the first arrows were fired the battle has moved to the digital world. It's not just about e-books either. Now, it's about all sorts of digital content. Including apps.

So, while Apple and Amazon dominate marketshare and net new app additions each quarter the more interesting battle (until the Android Market gets closer to catching Apple) is between the two companies helping bring the low cost tablet to the masses. In the recently launched App Marketshare Tracker for Q4 it is clear which platform developers prefer; Amazon. Despite the Kindle Fire launching in mid Q4 Amazon's aggressive effort to court developers has allowed its Kindle Fire app store to already eclipse the established B&N store. In fact by the end of the quarter Amazon had more than 13,000 Kindle Fire Apps available while Barnes and Noble only offered 2,000 Nook apps. And while the Nook App Store grew by huge percentages - demonstrating increased developer interest in the platform it still has ways to go to catch up to Amazon.

The battle between Barnes and Noble and Amazon is just one pertinent data point discussed in the report App Marketshare Tracker Q4 - Kindle Catches Fire while Nook Slowly Smolder. 

Other questions addressed include:

• Which categories are growing the fastest?
• How is the battle between Apple and Android shaping up?
• Which ecosystem is winning the battle for third place?