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Better Get Your App On Or Risk Fading Into Oblivion

When the Apple ( AAPL ) App Store and Alphabet ‘s ( GOOGL ) Google Android Market (now Google Play) burst onto the scene in 2008, they created two powerful channels for app distribution that fueled a smartphone revolution and pushed PCs to the back seat. What also emerged was an explosion in apps that have become dominant factors in business success. Sales of mobile apps are projected to reach $51 billion in 2016 and to exceed $101 billion in 2020, driven by strong growth in smartphones in developing economies, says a report by market tracker App Annie. The $51 billion would mark a 24% increase from last year, said the report . App Annie estimates the number of apps downloaded will jump 33% this year to 147.3 billion, led by China. Google Play and third-party Android stores will maintain their dominance between now and 2020 in terms of the number of apps. But Apple will continue to lead in the all-important category of revenue. “Apps have become the primary way we engage with media, brands and ultimately with each other,” the report said. “Now all companies need to view themselves as app publishers, irrespective of their mobile strategy.” Google Play downloads are set to more than triple to 166.4 billion in 2020. The vast majority of this growth will be driven by rapidly growing smartphone adoption in under-penetrated emerging markets like India, Mexico, Brazil and Indonesia, says App Annie. It expects Apple downloads to rise 46% to 35.2 billion over the same period. On the revenue side, App Annie forecasts Apple to remain the highest-grossing store through 2020, doubling to reach $44.8 billion in 2020. But Google Play and third-party Android stores will see faster growth in this span, with combined revenue rising to $55.7 billion in 2020 from $18.3 billion last year. The report said apps drive engagement and brand loyalty and can be monetized directly through app stores, advertising, commerce or any combination of the above. Apple stock was near 94.27, down 0.8% in the stock market today . Alphabet stock was up close to 1%, near 707.

Virtual Reality Wars Heat Up With Facebook Oculus PCs Coming

Facebook ( FB ) is closer to engaging in a virtual reality battle with the announcement that PCs optimized for its Oculus Rift headset are around the corner. Virtual reality gear was a star of the CES consumer electronics game show in Las Vegas last month, with at least three VR systems coming this year. The Oculus Rift will be joined by the Vive from China-based HTC, which also needs a souped-up PC, along with Sony ( SNE ) PlayStation VR goggles, which work with the PlayStation 4 game console. Oculus, which Facebook acquired for $2.1 billion in cash and stock almost a year ago, announced that orders for PCs optimized for the Oculus Rift headset begin Feb. 16. The initial batch of PCs will be in limited quantities and ship in April. Facebook has priced its Oculus Rift headset at $599. Oculus-ready PCs will cost roughly $1,100 to $1,600. Makers include Alienware, Asus and Dell. Also in the game is Alphabet ( GOOGL ), which is working on VR eyewear through its Google Glass platform. Alphabet already offers a virtual-reality experience through its Cardboard VR headset, designed mainly as a companion for YouTube videos. Apple ( AAPL ) is getting its VR game on through the acquisition of companies in the virtual reality space, the most recent being Flyby Media, an image recognition company used by Alphabet. Apple has not yet announced a VR device. Apple has also filed a patent for a head-mounted display apparatus. Microsoft ( MSFT ) also is pursuing virtual reality with its HoloLens headset. Microsoft HoloLens enables holographic computing that can be used for things like creating movie creatures to designing cars. In some cases, the new devices  will be pure virtual reality. The Facebook Rift, for example, immerses viewers into a new world. Others fit the category of augmented reality, where computer-generated images are superimposed on the real world, such as with Microsoft’s HoloLens or Google Glass. Consulting firm Deloitte says VR hardware sales will reach about $700 million this year, with another $300 million in software sales. Analysts estimate Facebook’s VR headsets revenue this year at roughly $350 million to $400 million. RELATED: Alibaba Invests Big In Magic Leap, A Move Beyond Virtual Reality

Apple Ad Block Doesn’t Stop Criteo From Crushing Q4 Earnings

Despite worries about the impact of Apple ‘s ( AAPL ) ad-blocking feature on its business, ad tech firm Criteo ( CRTO ) posted a solid Q4 earnings beat before the market open Wednesday, sending Criteo’s stock soaring. Criteo stock was up 21% in midday trading in the stock market today , near 31.50. Criteo stock, though, is still off 48% from its all-time high of 60.95, touched in March 2014. The Paris-based company posted Q4 revenue minus TAC — traffic acquisition costs, or what the company pays other sites to carry its ads — of 145.75 million euros ($164 million), up 51% year over year in euros. That beat analysts’ expectations for 138.2 million euros. The French ad company reported EPS ex items of 0.66 euro (74 cents), up 78% in euros. That blew past the EPS ex items of 0.40 euro analysts had forecast. For Q1, the company guided revenue ex-TAC of $153 million-$158 million (139 million-144 million euros, up 32%-36% year over year in euros). Analysts are expecting 140.8 million euros. The company guided adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) in Q1 of $36 million-$41 million (33 million-37 million euros, up 28%-46%). Wall Street had been keen to see whether Apple’s decision last year to allow ad blocking on iPhones for the first time had impacted Criteo’s revenue, and whether the company’s China expansion was on track. Criteo reported revenue in its Asia-Pacific region rose 76% in Q4 and represented 20% of total revenue ex-TAC. “I am very pleased with our growing profitability and strong free cash flow generation in 2015,” Criteo CFO Benoit Fouilland said in the earnings release. “Our unique financial model continues to be a key differentiator in our space.” Criteo Says Facebook Mobile Ads Help The company said that more than 3,000 clients in the quarter “were live on Facebook mobile via our integration with dynamic product ads as of Dec. 31.” Criteo said it generated 25% of its ex-TAC revenue “from users that were matched on at least two devices, illustrating the continued deployment of our cross-device solution to our clients.” Criteo is “creating one of the largest cross-device advertising mousetraps, which will complement advertisers’ ability to measure performance outside of Facebook and Alphabet ( GOOGL )-owned Google,” said RBC Capital Markets analyst Rohit Kulkarni in a November research note. Paris-based Criteo will cease reporting in euros after Q4. The company will be adhering to GAAP reporting in U.S. dollars. Criteo embeds browser cookies — tiny text files that let websites recognize users and their preferences when they return to a site — for about half of the 100 largest retail and travel websites in the U.S. Criteo gets paid for serving ads only if a user clicks on the ads, and it collects a bigger cut if the user goes on to buy a product from or otherwise engages with that advertiser. Apple stock, meanwhile, was up a fraction in midday trading, near 95.