Table of Contents
Overview
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- What you need to know
- Products covered in this report
Executive Summary
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- The market
- New monetisation opportunities lead to steady growth
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- Figure 1: Gross mobile app revenue for iOS and Google Play Store, 2012-22
- Figure 2: Gross mobile app revenue for iOS and Google Play Store (source data), 2012-22
- iOS takes double the app revenue of Google Play
- Game apps top revenue charts
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- Figure 3: Top apps, by revenue, on the UK iOS App Store, September 2017
- Figure 4: Top apps, by revenue, on the UK Google Play Store, September 2017
- The consumer
- Android reaches the greatest proportion of mobile device owners
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- Figure 5: Operating system share by device type, July 2017
- iOS users show more regular app usage
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- Figure 6: Self-reported app usage, by operating system ownership, July 2017
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- Figure 7: Self-reported app spend, by operating system ownership, July 2017
- Tablets increase app engagement and purchasing
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- Figure 8: Self-reported app spend, by access to device type, July 2017
- Messaging and social media dominate app usage
- iOS users more receptive to intrusive app features
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- Figure 9: Self-reported app usage, July 2017
- Consumers show tentative interest in augmented reality and location-based services
- Voice control for the home, not the mobile
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- Figure 10: Situations in which people would be happy to use voice commands to control devices, April 2017
- What we think
Issues and Insights
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- App innovation led by digital assistants, augmented reality, and artificial intelligence
- The facts
- The implications
- Opportunities for monetisation
- The facts
- The implications
The Market – What You Need to Know
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- App revenue continues to rise
- Ownership levels for smartphones and tablets remain steady
- Subscription services provide boost for non-gaming apps
- Smartwatches offer new opportunities for app development
- Apple’s App Store leads Google Play in revenue
- Operating systems pushing digital assistants and converging app functions
Market Size, Segmentation and Share
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- New monetisation opportunities lead to steady growth
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- Figure 11: Gross mobile app revenue for iOS and Google Play Store, 2012-22
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- Figure 12: Gross mobile app revenue for iOS and Google Play Store (source data), 2012-22
- iOS takes double the app revenue of Google Play
- Game apps top revenue charts
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- Figure 13: Top apps, by revenue, on the UK iOS App Store, September 2017
- Figure 14: Top apps, by revenue, on the UK Google Play Store, September 2017
- Forecast methodology
Market Drivers
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- Smartphone and tablet ownership remains stable as smartwatch ownership rises
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- Figure 15: Household ownership of smartphones, tablets and smartwatches, January 2012-June 2017
- A large app market limits discovery
- Mobile device engagement high in younger users
- Converging app functions and limited storage create a competitive market
- EU data roaming charges
Companies and Brands – What You Need to Know
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- Operating systems make app development easier
- Market players pushing innovation in AR
- Entertainment and leisure tops adspend
- Most above-the-line adspend is on TV
Launch Activity and Innovation
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- Google makes its payment API available to developers
- iOS 11 brings a redesigned App Store
- Android Go – Another attempt to break into emerging markets
- App ‘sales’ now implemented in Google Play
- Advances in AR predicted with the release of Android and Apple development tools
- Google Lens
- Instant apps released for developers
Advertising and Marketing Activity
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- Entertainment & Leisure apps most advertised
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- Figure 16: Total above-the line, online display, and direct mail advertising expenditure on mobile apps, by app category, 2016
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- Figure 17: Top 15 advertisers by total above-the line, online display, and direct mail advertising expenditure on mobile apps, 2016
- TV remains the most popular media type
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- Figure 18: Share of advertising media type for mobile apps, by app category 2016
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- Android operating system has the biggest reach, but spending behaviour greatest amongst iOS users
- Owning a tablet also increases app engagement and spending
- The most popular apps are social media and messaging apps
- Receptiveness to data sharing greater amongst iOS users
- AR offers a new way to perform app functions
- Digital assistants
Smartphone and Tablet Operating Systems Used
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- Android reaches the greatest proportion of mobile device owners
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- Figure 19: Operating system reach to device owners (either smartphone or tablet), July 2017
- Market share across type of device
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- Figure 20: Operating system share by device type, July 2017
- Operating system key demographics
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- Figure 21: Operating system reach to device owners (either smartphone or tablet) by age, July 2017
Engagement and Spending Across Users
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- iOS users show more regular app usage
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- Figure 22: Self-reported app usage, by operating system ownership, July 2017
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- Figure 23: Self-reported app spend, by operating system ownership, July 2017
- Tablets increase app engagement and purchasing
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- Figure 24: Self-reported app usage, by access to device type, July 2017
- Figure 25: Self-reported app spend, by access to device type, July 2017
- Spending behaviour highest in the young
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- Figure 26: Self-reported app spend, by age, July 2017
App Usage
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- Messaging and social media dominate app use
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- Figure 27: Self-reported app category use amongst app users, July 2017
- Gaming a popular throwaway activity for casual users
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- Figure 28: Self-reported app category use amongst app users, by number of app categories, July 2017
Attitudes towards Apps
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- App users are concerned about data sharing…
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- Figure 29: Self-reported app usage, July 2017
- …but users are more willing to use social media to access these apps
- Android users prefer the desktop version of apps
- Push notifications can be effective if used sparingly
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- Figure 30: Self-reported app usage, by access to device type, July 2017
- Consumers want multi-functional apps
App Features
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- AR, digital assistants and location-based services
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- Figure 31: App features people would use, July 2017
- AR must seamlessly integrate with app functions
- Social media filters ease users into AR
- Location-based services on the rise, but privacy concerns must be addressed
- Voice control for the home, not the mobile
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- Figure 32: Situations in which people would be happy to use voice commands to control devices, April 2017
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Forecast methodology
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- Figure 33: Best- and worst-case forecast for iOS and Google Play Store revenue, 2017-22
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