Apps are sure to be the rage at the Consumer Electronics Show (CES), as manufacturers look to cash in on the more than 41 billion phone and tablet downloads in 2012. And the app market is an area where Apple continues to dominate.

The average selling price of paid downloads is declining across every major platform, as competition heats up and devices move into emerging markets. To offset this loss, storefronts, carriers, and developers look to virtual goods — an industry which will quintuple in size from 2011 to more than US$1 billion in 2012. Apple and Android look to take advantage of their positions to retain developer interest, maintain a steady flow of high quality apps, and keep consumers wedded to their ecosystems, as seen in, “Apps Forecast 2008 – 2013: Virtual Goods Drive Real Revenue,” from the Strategy Analytics research group (

“The introduction of tablets from Amazon and Barnes and Noble and a renewed push for Windows Phone ensure an intensifying battle for the third horse in the apps ecosystem race,” says Josh Martin, director of Apps Research at Strategy Analytics. “Unlike paid downloads that offer one time payment, virtual goods allow developers to earn recurring revenue from heavily used apps, making the business opportunity appealing. Despite the importance of virtual goods, few platforms beyond the leaders have stepped up. Thus, Android and Apple may well dominate into the future.”