Apps Fueling Economic Grow

According to a study by TechNet, 466,000 jobs have been created as a result of the app economy created by Apple and other tech companies.  How exactly are all of these jobs being created and why?  How this burgeoning new industry is driving growth and creating jobs is a story worth telling.

In June 2007, Apple ushered in a new wave of cell phones.  Although the concept of a smartphone was not entirely new, Apple’s iPhone led to a new era in digital communications.  According to this 2011 Pew study, over 1/3 of adults now own a smartphone, just 4 1/2 years after the iPhones release.

Since the launch of the iPhone, Apple has sold over 315 million iPhones and averages around 40 app downloads per phone sold.  When you include iPads into the mix, you’re talking about over 200 million mobile devices sold by Apple that run iOS, Apple’s mobile operating system, and can thus run apps sold from the iTunes Store.  Since the inception of app sales in the iTunes Store, there have been over 14 billion apps downloaded from the Apple Store. Although those include both paid and free apps, any download represents an act that could be helping to drive job growth.  Many of these apps derive their income from sources other than a purchase at the point of sale—some derive income from advertising, while others, such as magazines, can get revenue from subscriptions.  If you take into account that Apple has the revenue derived from app sales, and you can see what a lucrative field app creation has become.

And Apple isn’t the only one in the game—far from it. Android, an operating system created by Google and run on a variety of smartphone handsets, is run on over 250 million phones, with 11 billion apps downloaded from the Android Marketplace.  And there are many phone using Microsoft’s platform, encouraging applications that reach across many different devices.

There are plenty of examples of companies making it big by creating apps for mobile devices.  One of the biggest examples is the maker of everyone’s favorite time-waster game, Angry Birds. The creator, Rovio Mobile, says that over 500 million of their apps have been downloaded across the mobile platforms their apps are available on for download.

And it’s not just mobile platforms.  Facebook has created an ecosystem of its own, allowing their nearly 1 billion users to access thousands of apps for a variety of uses.  One company, Zynga, went public in December 2011, and is now valued in the area of $7 billion.  Zynga is one of many companies that have been able to build a successful business and create hundreds of jobs because of this new marketplace.

Mobile devices have become a huge part of people’s lives, with the average person being attached to their smartphone for over an hour per day.  And get ready for this economy and smartphone use to continue to boom.  A study released yesterday by Forrester makes the claim that 1 billion people will own smartphones by 2016–just four short years away.  In a larger sense, companies not in the app business will also be affected by the huge growth in mobile computing and app creation.  Many traditional companies, such as retail operations, will perhaps find an entirely new market for their products, and will need to prepare for their products to be sold in this new marketplace.  As the TechNet study points out, it’s not just tech jobs being created.  There are sales jobs, marketing, and administrative and operational positions that need to be filled.  It’s a new digital frontier, the likes of which we probably haven’t seen since the dot-com boom of the late 90’s.  Only this time, it appears that real wealth and jobs are being created.

Zack Christenson writes on digital tech issues for the American Consume Institute

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