Mobile Device Apps - UK - October 2014

INTRODUCTION
Definitions
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Value of application sales and in-app purchases in the UK, 2012-14(e)
Market factors
Smartphones reach 75% of consumers; tablets in 50% of homes
App usage continue to increase
New categories come from the connected home and launch of wearables
Companies, brands and innovation
Figure 2: Top 10 most profitable countries by total app revenue, by store, July 2014
The consumer
Number of apps downloaded
Figure 3: Proportion of consumers who have ever downloaded apps for their devices, July 2014
Figure 4: Number of apps downloaded onto smartphone/tablet in the last month, July 2014
Amount spent on apps and in-apps
Figure 5: Amount spent on buying smartphone and tablet apps, July 2014
Figure 6: Amount consumers have spent on in-app purchases, July 2014
App preferences across devices
Figure 7: Application preferences across devices, July 2014
Attitudes towards apps
Figure 8: Consumer attitudes towards buying smartphone applications, July 2014
Figure 9: Reasons why consumers have not downloaded apps, July 2014
What we think
ISSUES AND INSIGHTS
Low-income consumers do not participate in in-app purchases (IAPs)
The facts
The implications
Which app stores should developers target?
The facts
The implications
TREND APPLICATION
Trend: Make it Mine
Trend: Influentials
Mintel Futures: East Meets West
MARKET DRIVERS
Key points
75% of consumers have a smartphone; 55% a tablet in the home
Figure 10: Technology in consumer households, July 2014
Figure 11: Technology consumers personally own, July 2014
Figure 12: Household and personal ownership of computing technology, November 2009 – April 2014
Figure 13: Smartphone and tablet ownership, by age, July 2014
Android is the dominant OS on both devices
Figure 14: Smartphone and tablet ownership by operating system, July 2014
iOS and Android smartphones and tablets treated differently by consumers
Figure 15: iOS and Android tablet ownership, by age, July 2014
Figure 16: iOS and Android smartphone ownership, by age, July 2014
Android has greatest level of paired devices
Figure 17: OS on consumer smartphones, by OS on consumer tablets, July 2014
App use increased by 115% in 2013
Figure 18: Year-on-year growth in app usage, 2012 -13
Figure 19: Text messages and internet-connected messages sent in the UK, 2007-13
Boost to UK economy will promote government support
More health and home apps likely to appear over 2015
WHO’S INNOVATING?
Key points
Helpouts connects experts and amateurs
Hyperlapse uses accelerometer to boost user videos
MotionSavvy understands sign language
Slingshot aims to provoke greater engagement
MARKET SIZE, SEGMENTATION AND SHARE
Key points
Market sees consistent year on year growth
Figure 20: Value of application sales and in-app purchases from the iOS App Store and the Google Play Store in the UK, 2012–14 (e)
Figure 21: iOS App Store and Google Play store UK revenue, by revenue model, July 2014*
Figure 22: Total proportion of apps on each store that are paid or free, globally, June 2014*
Freemium content provides big boost to Google Play
Figure 23: Top ten most profitable countries by total iOS and Google app revenue, by store, July 2014
Microsoft and BlackBerry still lag in available apps
Figure 24: Number of apps in Apple, Google, Microsoft and BlackBerry app stores, December 2008 – June 2014
Google Play growth in apps cut by four fifths
Figure 25: Percentage growth in available store apps, 2011 - 2014
Worldwide app downloads to be 95% free in 2017
Figure 26: Estimated app sales worldwide, 2012-17
COMPANIES AND PRODUCTS
Apple Inc. (iOS)
Background
Number of apps
Financials and strategy
Figure 27: Apple Q3 results (April – June), fiscal year 2009-14
Google Inc. (Android)
Background
Number of apps
Financials and strategy
Microsoft Corporation (Windows Phone 8)
Background
Number of apps
Financials and strategy
BlackBerry
Background
THE CONSUMER – NUMBER OF APPS DOWNLOADED
Key points
Most devices users have downloaded an app at some point
Figure 28: Proportion of consumers who have ever downloaded apps for their devices, July 2014
OS rather than device determines participation
Figure 29: Smartphone users who have ever downloaded an app, by OS, July 2014
Figure 30: Tablet users who have ever downloaded an app, July 2014
Smartphone users very marginally more likely to have downloaded apps
Figure 31: Number of apps downloaded onto a smartphone/tablet in the last month, July 2014
Lack of distinct age digression suggests apps are mainstream
Figure 32: Number of smartphone apps downloaded in the last month, July 2014
Figure 33: Number of tablet apps downloaded in the last month, July 2014
THE CONSUMER – AMOUNT SPENT ON APPS AND IAPS
Key points
Smartphone users slightly less likely to spend than tablet owners
Figure 34: Amount spent on buying smartphone and tablet apps, July 2014
Figure 35: Amount spent buying apps on smartphones in the last month, by age, July 2014
Figure 36: Amount spent buying apps on tablets in the last month, by age, July 2014
Wealthier consumers a third less likely to have only bought free apps
Figure 37: Amount spent on smartphone apps by gross annual household income, July 2014
Figure 38: Amount spent on tablet apps by gross annual household income, July 2014
Windows device owners spend the most
Figure 39: Amount spent on smartphone apps, by smartphone OS, July 2014
Figure 40: Amount spent on tablet apps, by tablet OS, July 2014
In-app spending comparatively rare
Figure 41: Amount consumers have spent on in-app purchases, July 2014
Apps could partner with points schemes for in-app purchases
THE CONSUMER – APP PREFERENCES ACROSS DEVICES
Key points
Consumers prefer to browse for apps on tablets
Figure 42: Application preferences across devices, July 2014
Figure 43: Search results for “google” in iOS, Android and Windows Phone, September 2014
Smartphones aid discoverability
Usage of devices is equal, despite clear tablet preference
Figure 44: Devices consumers prefer to use apps on, by age, July 2014
Even customers who prefer spending on smartphones spend more on tablets
Figure 45: Average monthly spend on apps by device consumers prefer to buy for, July 2014
THE CONSUMER – ATTITUDES TOWARDS APPS
Key points
Apps the determining factor for 29%
Figure 46: Consumer attitudes towards buying smartphone applications, July 2014
Figure 47: Attitudes towards buying apps, by tablet OS, July 2014
A third who say apps are crucial also want multiplatform access
Consumers who prefer to pay outright for apps will still spend on in-app purchases
Figure 48: Spend of more than £5 on apps or in-app purchases through smartphones, July 2014
Half of users who have not downloaded apps have no interest in them
Figure 49: Reasons why consumers have not downloaded apps, July 2014
Smartphones imply dedicated device ownership
Figure 50: Non-app buyers by tablet OS owned, July 2014
Figure 51: Non-app buyers by smartphone OS owned, July 2014