Research Group Predicts Tablets Will Be More Profitable than Smartphones by 2018

Parental Controls Kid on iPadTablets are the new black. Or, at least ABI Research thinks it will be five years from now. According to a recent report from the analytics firm, revenue from tablet apps will reach 35 percent of all app revenue in 2013 and will outpace smartphones by 2018.

ABI’s “Mobile Applications Research Service,” finds tablet apps will generate $8.8 billion in revenue while smartphones will generate $16.4 billion. Apple’s iOS App Store will capture 65 percent of app revenue while Android will hold 27 percent and other mobile platforms will pick up the remaining 8 percent.

Even more interesting is that, according to ABI, popularity of tablets will increase over the next few years to the point where app revenue for tablets will breeze past smartphones in five years, which will then see a combined revenue base of $92 billion.

“The dynamic is quite straightforward,” says senior analyst Aapo Markkanen. “The larger screen makes apps and content look and feel better, so there are more lucrative opportunities. One might think that the bigger installed base of smartphones would compensate for the disparity, but that notion fails to take into account the arrival of low-cost tablets, which hasn’t even started yet at its earnest. The smartphones paved the way for them, but in the end we believe that it’s the tablets that will prove the more transformative device segment of the two.”

The smaller screen tablet has been a big hit lately. The iPad mini sold so fast that, until a few weeks ago, Apple couldn’t keep up with demand. ABI believes that lower cost tablets will appeal to a, currently underserved market, which will increase the overall app download significantly over time.

About Lory: Writer of all things app related, traveler of the space-time continuum, baker of really great cookies. Follow me @appaholik