Annual mobile application downloads are forecast to grow by 56.6% per year to reach 98 billion worldwide in 2015, predicted Berg Insight on Friday. The research firm said the growth will continue to be driven by smartphones, which will account for 70% of all handsets sold in 2015. 62% of the 98 billion apps will be downloaded to iOS and Android devices, with Windows Phone completing the top three.

However, Berg Insight does not expect revenue growth to keep pace with download volumes. The company predicted total app revenues will grow by 40.7% per year to €8.8 billion by the same date, from €1.6 billion in 2010.

“Even though the download numbers will increase during the forecast period, most apps are free to download and app monetisation will be a challenge for developers”, warned Johan Svanberg, senior analyst at Berg Insight, in a research note.

“Free to download monetisation strategies such as in-app advertising and in-app purchasing will be increasingly important,” he said.

Indeed, €300 million of the €1.6 billion of app revenue in 2010, around 16%, was generated by in-app advertising. Berg Insight expects that figure to rise to €750 million in 2011, and to €3.5 billion – about 29% of total app revenues – in 2015.

“In-app advertising is more of a volume game and Android will surpass iOS in 2012 as the platform that generates the most in-app ad revenues,” said Berg Insight.

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