Research: HTML5 Will Disrupt the Mobile App Market

— March 31, 2011

The research firm Smith’s Point Analytics says in a new report that HTML5 will disrupt the mobile application market and mobile Web application platform vendors are well positioned to seize the opportunity. Smith’s Point Analytics estimates that mobile Web application platforms will generate almost $2.6 billion in service revenue by 2015. These platforms, which enable Web developers to create mobile applications using HTML5 and JavaScript, could grow revenues at a 114% CAGR from 2010 to 2015.

The venture capital community is taking note of this emerging opportunity and has risked over $35 million financing multiple vendors to develop their offerings and business models. “Vendors are taking different approaches to serve Web developers by creating diverse architecture to streamline application development. The ability to sell developers on the right approach will be paramount to success,” says Peter Crocker, founder and principal analyst at Smith’s Point Analytics.

Three primary drivers will propel the growth of mobile Web applications:

1)      The increased performance of Web applications enabled by HTML5 and innovative development architectures that put Web app functionality on par with native applications.
2)      The large pool of Web developers available to leverage their skills and new tools to create a growing number of rich mobile Web applications.
3)      The ability of Web applications to run across multiple mobile operating systems.
 
Among other disruptions, the application distribution model will change drastically as robust applications will be increasingly available on the Web in addition to OEM-controlled app stores. This changing dynamic will provide new opportunities within the ecosystem to gain power and influence and social networking players will be big winners. The business model also changes as the revenue streams generated from app stores diminish, causing platform vendors to turn to value-added services to generate income.

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