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According to a new app storefront forecast published by Strategy Analytics, the app economy is strong and getting stronger as paid downloads are expected to drive nearly $2 billion per quarter by the end of 2012.

Driving more paid downloads, higher ASPs, and more total apps than any other platform, Apple remains king of the app economy through 2012, the research firm says.

"The Android Market is poised to overtake the Apple App Store in quarterly volume by the end of 2012, and Android generally will do so even sooner with additional assistance from third party distribution outlets such as the Amazon App Store, GetJar, Nook and others," Strategy Analytics estimates.

The battle between Google and Apple is only one subtext in a market that will continue grow exponentially for the next six quarters. The unbridled opportunity of apps must face hurdles such as successful transition to new devices, improved means of discovery and driving revenue in emerging markets.

According to Josh Martin, Strategy Analytics Director of Apps Research, "Apps are a multi-billion dollar industry on their own--and are playing an increasingly important role in the phone purchase process. After the OS decision has been made, apps play a critical role in augmenting platform stickiness. Win the apps, win the wallet?and win long term devotion."



Battle of operating systems

Tablets using Microsoft 's software saw stronger sales than the high-profile Playbook from BlackBerry maker Research In Motion in the second quarter, according to Strategy Analytics.

Microsoft has yet to launch the Windows 8 software, which will be designed specifically for tablet computers. However, Microsoft still picked up a 4.6 percent share of the market in the second quarter compared with a 3.3 percent share for Playbook, which is based on RIM's QNX software.

RIM's Playbook tablet computer has not been received very well.

Meanwhile market leader Apple fought off an increasingly strong challenge from Google. Apple's iPad tablet dominated the market with a 61.3 percent share. But Android increased its market share to 30 percent from 2.9 percent in the same quarter a year ago, when Apple had 94.3 percent of the market, the technology research firm, Strategy Analytics said.