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Mobile Phone and Tablet Apps - UK - October 2015

Published By :

Mintel

Published Date : Oct 2015

Category :

Lifestyle

No. of Pages : N/A

The lion's share of app revenue in the UK market comes from free apps with either in-app purchases or in-app advertising. The abundance of free apps in these different forms means that paid apps account for a relatively small proportion of the market value-wise and many will look for feature-lite versions they can try before they buy. However, there are still many opportunities in the paid market for apps, particularly if backed up by a strong brand name.

Table of Content

Overview

What you need to know
Scope of the report

Executive Summary

The market
Market size, segmentation, and share
Figure 1: Value of application sales and in-app purchases from the iOS App Store and the Google Play store in the UK, 2012-15 (est)
The freemium model increases its revenue share
Figure 2: iOS App Store and Google Play store UK revenue, by revenue model, July 2014
Apple dominates the revenue stakes
Figure 3: App store revenue split for iOS App Store and Google Play, by country, July 2015
The rise of smartphones: a bigger audience for adverts
Figure 4: Ownership of mobile phones, by type of phone, January 2012-June 2015
The consumer
Android dominates smartphones, iOS dominates tablets
Figure 5: Operating system on mobile device, July 2015
Men more likely to be high-frequency downloaders
Figure 6: Number of free apps downloaded, July 2015
In-depth games with a strong brand name suit the paid app market
Figure 7: Number of paid apps downloaded on smartphone, tablet, or smartwatch, July 2015
Brands need to reassure consumers about app data protection
Figure 8: Openness to sharing data, July 2015
Consumers somewhat open to adverts in free apps
Figure 9: Attitudes towards advertisements in apps, July 2015
Peer recommendations biggest influencer for app downloads
Figure 10: App download influences, July 2015
What we think

Issues and Insights

The freemium model can boost downloads, increase revenue, and offer a degree of customisation
The facts
The implications
Younger consumers the most open to in-app advertising
The facts
The Implications

The Market – What You Need To Know

Market continues to grow but at a slower rate
Freemium apps are the most lucrative app monetisation strategy
The iOS App Store pulls in the most revenue
The near ubiquitous smartphone opens up in-app advertising potential
The rise in tablet ownership is good for entertainment apps

Market Size, Segmentation and Share

UK app market still growing but at a slower rate
Figure 11: Value of smartphone and tablet application sales and in-app purchases from the iOS App Store and the Google Play Store in the UK, 2012-15 (est)
In-app purchase model dominates revenue generation
Figure 12: iOS App Store and Google Play store UK smartphone and tablet app revenue, by revenue model, July 2014
Figure 13: Top grossing free smartphone and tablet apps from the UK iOS App Store, September 2015
Figure 14: Top grossing free smartphone and tablet apps in the UK Google Play store, September 2015
The UK app market remains strong
iOS apps dominate revenue worldwide despite the higher volume of Android downloads
Figure 15: App store revenue split for iOS App Store and Google Play, by country, July 2015

Market Drivers

Smartphones approaching near ubiquity among Millennials
Figure 16: Ownership of mobile phones, by type of phone, January 2012-June 2015
Figure 17: Personal ownership of smartphones, tablets, and smartwatches among UK consumers, June 2015
Tablets replacing desktops offer potential for entertainment apps
Figure 18: Household ownership of computers, by type, January 2012-June 2015
Low penetration of smartwatches, but opportunities are there
Figure 19: Ownership of smartwatches, June 2014-June 2015
Bigger screens are good news for app developers
Figure 20: Ownership of smartphones, by screen size, June 2015
Apple’s Swift language eases the pain of coding for developers

The Consumer – What You Need To Know

Android is most popular for smartphones
Men are more likely to be high frequency downloaders
Young men most likely to download paid apps but free demos still crucial
Consumers are wary of sharing their data with apps
Most consumers accept adverts in free apps
The Internet of Things (IoT) can be a major benefit for app developers
Peer recommendations are the biggest driver of downloads
Women are more likely than men to use the top three most common types of app

Operating System on Mobile Devices

Most smartphones run Android while iOS is most popular for tablets
Figure 21: Operating system on mobile device, July 2015
Can Apple entice Android users over to iOS 9 with its new app?
App building strategies; which platforms will reach most consumers?
Figure 22: Operating systems across all mobile devices, July 2015
Android development offers low barriers to entry for developers
iOS offers a more lucrative customer base
Windows Phone users key for productivity apps

Number of Free Apps Downloaded

Free apps as a tool to boost customer loyalty
Men most likely to be high-frequency downloaders
Figure 23: Number of Free Apps Downloaded on any device, July 2015
Apps can enhance the TV viewing experience
Big screen apps on the horizon as Apple rolls out the Apple TV app store
Tech-savvy smartwatch owners are ultra-high frequency downloaders
Monetisation of free apps: the IAP model
The IAP model for non-gaming apps

Number of Paid Apps Downloaded

Figure 24: Top paid apps on the Apple iTunes stores, September 2015
Figure 25: Top paid apps on the Google Play store, September 2015
Young men using iOS are the key target group
Figure 26: Number of paid apps downloaded, July 2015
People avoid paid apps that don’t have free feature-lite downloads
Figure 27: Behaviours related to feature-lite versions of paid apps, July 2015
Smartwatch owners as early adopters

Openness to Sharing Data with Apps

Data sharing with apps for commercial purposes
Figure 28: Openness to sharing data, July 2015
Consumers trust websites more than apps with their data
Figure 29: Consumer attitudes towards data sharing in apps and websites, July 2015
Figure 30: Consumer attitudes towards data sharing in apps and websites, by generation, July 2015
Why location and shopping data can go hand in hand
Self-tracking apps can be key in encouraging consumers to share data
Figure 31: Usage of fitness apps, by age group, July 2015

Attitudes towards Advertisements in Apps

In-app ad revenue growing as fast as IAPs
In-app advertisements have a strong position in the UK market
Figure 32: Attitudes towards Advertisements in Apps, July 2015
Students prefer to see in-app adverts rather than pay
Figure 33: Attitudes towards advertisements in Apps, by age group, July 2015
Frame in-app adverts as rewards
The rise of ad-blockers

Attitudes towards Apps

Mobile apps set to offer consumers greater control over their environment
Figure 34: How the Internet of Things connects the home
Companies can leverage apps for efficient customer care
Limited appeal for smartwatch apps but buzz around wearable tech could change perceptions
Brands should encourage ‘app gifting’
Figure 35: Consumer attitudes to mobile apps, July 2015

Download Influences

Recommendations from friends and family the top influencer
Figure 36: App download influences, July 2015
Female downloaders more likely to be influenced by word of mouth

Types of Apps Used

Women most likely to use top three apps genres
Figure 37: Types of apps used, July 2015
Most consumers use an average of 1 to 3 app types
Figure 38: Repertoire of types of apps used, July 2015
Figure 39: OS used by high frequency users (ie who use 8+ types of apps), by OS, July 2015

Appendix – Data Sources, Abbreviations, and Supporting Information

Abbreviations

List of Table

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