Analysts said mobile app stores will exceed 4.5 billion downloads in 2010, 82% of which will be free to end users.

Gartner forecasts worldwide downloads in mobile application stores to surpass 21.6 billion by 2013, with free downloads accounting for 87%.

"As smartphones grow in popularity and application stores become the focus for several players in the value chain, more consumers will experiment with application downloads," said Stephanie Baghdassarian, research director at Gartner. "Games remain the No. 1 application, and mobile shopping, social networking, utilities and productivity tools continue to grow and attract increasing amounts of money."

An app can be free because:

• The developer offers it at no cost to the consumer while charging for other things within the application

• The app is free to use but charges for physical goods that can be delivered through the application

• The app is free to users and derives its revenue from advertising

Worldwide mobile application stores' download revenue exceeded $4.2 billion in 2009 and will grow to $29.5 billion by the end of 2013. This revenue forecast includes end-user spending on paid-for applications and advertising-sponsored free applications. Advertising-sponsored mobile applications will generate almost 25% of mobile app stores revenue by 2013.

High-end smartphone users tend to be early adopters of new mobile apps and more trustful of billing mechanisms, so they will pay for applications that meet their needs. Average smartphone users will become less tech-savvy as smartphones drop in price to achieve mass market appeal, and these users will be more reluctant to pay for applications.

"Growth in smartphone sales will not necessarily mean that consumers will spend more money, but it will widen the addressable market for an offering that will be advertising-funded," Ms Baghdassarian added. "The value chain of the application stores will evolve as rules are set and broken in an attempt to find the most profitable business model for all parties involved."

Gartner research director Carolina Milanesi said that app stores will be a core focus for the mobile industry throughout 2010, and applications themselves will help determine the winner among mobile devices platforms. 

"Consumers will have a wide choice of stores and will seek the ones that make it easy for them to discover applications they are interested in and make it easy to pay for them when they have to," said Ms Milanesi. "Developers will have to consider carefully not only which platform to support but also which store to promote their applications in."