How mobile generates profits – the profitable software side of mobile.

How mobile is generating profits – the profitable software'ovoice of mobile

Mobile has become firmly established in our daily lives, becoming the companion of almost every person. In view of this fact, the market for smartphones and tablets is slowly becoming saturated – the “boom” period for mobile devices is over. After saturating the mobile market, the center of gravity has shifted to aspects such as marketing, advertising, payments or other services and applications – in other words, from hardware to software.

It’s here in mobile’s where the most is happening, and this area is also currently generating the most revenue.

More and more profitable marketplaces

While the smartphone market has largely saturated, other aspects of the mobile market continue to gain strength. Profits drawn from mobile apps – both Android and iOS – have been steadily increasing since 2013, although the iOS ones are doing better and generating higher revenues. At the end of 2022, App Store revenue was just over $2.5 billion, Google Play revenue was $1 billion less.

This is just one example showing that the mobile industry has definitely embraced the direction from hardware to software – revenue from the hardware market is gradually declining in favor of at least the apps themselves.

Mobile advertising will soon be the most lucrative

The mobile advertising industry is also thriving, and this upward trend is expected to continue. While annual revenues in digital advertising have been stable for several years now, the Mobile advertising revenue is gradually increasing and over the next three years, will continue to grow. The same situation occurs with m-commerce. By 2018, mobile advertising is expected to account for 15% of overall ad revenue in the U.S. It will be the most profitable medium, from which only TV will generate more profit.

Mobile-first targeted campaigns are already worth more than some of the campaigns with traditional media as the main target audience. The most profits among mobile advertising formats are generated by search engine ads, specifically Google – 60% of ad revenue comes from them. Quite a bit of revenue is also generated by ads posted on Facebook.

Increasingly valuable m-commerce

The value of mobile commerce will undergo steady growth, while traditional desktop e-commerce has already reached a level of great stability for several years. Of all the departments, m-commerce generates by far the highest profits, leaving other aspects of the industry behind. The m-commerce industry is growing much faster than traditional e-commerce, so that in a few years it may completely equal or even surpass this more traditional path.

Already 1/3 of e-commerce traffic is generated from tablets and smartphones.

M-banking and m-payments – money on your phone

Mobile is set to dominate and increasingly thrive in areas such as m-payments and m-banking. Already nearly half of those who use online banking, also use mobile banking. We are paying less and less with cash, and when it comes to cashless transactions – Mobile payments made in stores are expected to increase 42-fold over the next 4 years.

In addition to standard in-store payments or making transfers from a smartphone, there is also a growing number of apps that allow user-to-user transfers, such as the following. Facebook or Snapchat payments. All forms of m-banking and m-payments are particularly fond of the Y generation, or so-called “m-banking”.

Millenials. 1 in 5 millenials are “mobile only” users in the banking and payments category.

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