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Mobile Apps - US - October 2014

“The majority of mobile app users do not download paid apps, while the abundance of free apps now available has filled mobile marketplaces with a plethora of options. Getting consumers engaged with an app is only half the battle – drawing revenue from that engagement may be an even greater challenge. While mobile apps can focus on users who are most likely to pay for features, the value of free users should not be ignored, as these consumers will help to build awareness among their friends and other connections.”
- Bryant Harland, Technology and Media Analyst

This report looks at the following issues:

  • Free vs paid app downloads
  • Competing for app users’ limited time
  • The hardware fragmentation problem

 

Many mobile apps have shifted to alternate monetization strategies, including the ad-supported and microtransaction models. However, the majority of consumers show reticence to pay for mobile apps, even when they already have access to some of its features. As these pricing models evolve, balancing free and paid content will be critical for building awareness for new apps and for maintaining consumer interest.
 
Implications:
 
  • Although free app downloads benefit from a considerably larger audience than those of paid apps, the share of consumers who show willingness to pay for mobile software is not negligible. Furthermore, mobile apps can increase revenue per user by implementing enticing premium features, given the high share of paid mobile app users who reported purchasing additional content.
  • Given the limited time that the majority of users spend with apps, mobile software will benefit from creating seamless experiences between sessions. Features that enable users to pick up where they left off will be valuable for maintaining consumers’ attention, as this ensures that they can easily access the content and features they want.

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Consumer survey data
            • Abbreviations and terms
              • Abbreviations
                • Terms
                • Executive Summary

                    • Market factors
                      • Figure 1: Number of paid vs free app downloads, June 2014
                    • Google, Facebook, Yahoo lead in monthly unique visitors
                      • Figure 2: Top 10 mobile apps by monthly unique visitors (in thousands), June 2014
                    • The consumer
                      • Most popular categories of apps
                        • Figure 3: Types of mobile apps used, August 2013-March 2014
                      • More than one third of app users know what they’re going to download before browsing
                        • Figure 4: Mobile app discovery habits, June 2014
                      • One fourth of consumers frustrated by in-app ads
                        • Figure 5: Receptiveness to in-app advertising, by age, June 2014
                      • Behavior a key driver of receptiveness to ads
                        • Figure 6: Use of in-app advertising for app discovery, by paid and free app downloads, June 2014
                      • What we think
                      • Issues and Insights

                          • Free vs paid app downloads
                            • The issues
                              • The implications
                                • Competing for app users’ limited time
                                  • The issues
                                    • The implications
                                      • The hardware fragmentation problem
                                        • The issues
                                          • The implications
                                          • Trend Applications

                                              • Trend: Mood to Order
                                                • Trend: Influentials
                                                  • Trend: The Suite Life
                                                  • Market Drivers

                                                    • Key points
                                                      • Global mobile data traffic rising
                                                        • Apps benefit from increasing opportunity among first-time device buyers
                                                          • Figure 7: Increasing ownership of personal electronics, January-June 2014
                                                        • International apps face a different device ecosystem
                                                          • Figure 8: Operating system of current smartphone among Chinese consumers, by percentage share, December 2013
                                                          • Figure 9: Operating system installed on UK consumers’ smartphones, November 2013
                                                      • Leading Apps

                                                          • Figure 10: Top 10 mobile apps in the US by monthly unique visitors (in thousands), June 2014
                                                      • Innovations and Innovators

                                                        • Haptic technology
                                                          • Figure 11: Microsoft Researcher Hong Tan’s Explanation of Haptic Feedback
                                                        • CamMe relies on gestures to take selfies
                                                          • Figure 12: CamMe App Screenshot
                                                      • Marketing Strategies

                                                          • Strategy: Gamify mobile ads
                                                            • Strategy: Behavior-based targeting
                                                              • Strategy: Deals to encourage downloads
                                                                • Figure 13: Travelocity Mobile App Ad, July 2014
                                                                • Figure 14: Zappos Mobile App Ad, July 2014
                                                            • Platforms Used for Mobile Apps

                                                              • Key points
                                                                • Android and iOS lead as primary smartphones
                                                                  • Figure 15: Smartphone platforms used most often, June 2014
                                                                • Tablet app usage is more fragmented despite Apple’s and Google’s lead
                                                                  • Figure 16: tablet platforms used most often, June 2014
                                                                • Android smartphones more popular among young men, iOS among young women
                                                                  • Figure 17: Android and iOS usage (most often), by gender and age, June 2014
                                                                • One third of consumers use more than one platform
                                                                  • Figure 18: Mobile devices also used, by gender and age, June 2014
                                                              • Types of Smartphone and Tablet Apps Used

                                                                • Key points
                                                                  • The majority of app users are on cell phones or smartphones
                                                                    • Figure 19: Types of mobile apps used, August 2013-March 2014
                                                                  • Consumers’ smartphone app usage trends
                                                                    • The majority of women aged 18-34 play games on their smartphones
                                                                        • Figure 20: Types of mobile apps used on smartphones or cell phones, by gender and age, August 2013-March 2014
                                                                      • Consumers from larger households more likely to use entertainment apps
                                                                        • Figure 21: Types of mobile apps used on smartphones or cell phones, by household size, August 2013-March 2014
                                                                      • Consumers’ tablet usage trends
                                                                        • Consumers aged 55 and older most likely to use local information apps on a tablet
                                                                          • Figure 22: Types of mobile apps used on tablets, by gender and age, August 2013-March 2014
                                                                      • Free and Paid App Downloading Trends

                                                                        • Key points
                                                                          • Free app downloads vastly outnumber paid app downloads and in-app purchases
                                                                            • Figure 23: Number of paid vs free app downloads, June 2014
                                                                          • Men aged 18-34 most likely to pay upfront for apps and purchase premium content
                                                                            • Figure 24: Incidence of free and paid app downloads, by gender and age, June 2014
                                                                          • App users from households with incomes of $75K+ most likely to download paid apps
                                                                            • Figure 25: Incidence of free and paid app downloads, by household income, June 2014
                                                                          • Paid app users are more likely to download large numbers of apps
                                                                            • Figure 26: Number of app downloads and deletions, by downloaded free and paid apps, June 2014
                                                                          • Little difference in downloading habits among iOS and Android users
                                                                            • Figure 27: Number of paid apps downloaded, by device used most often, June 2014
                                                                        • Consumer Spending on Mobile Apps

                                                                          • Key points
                                                                            • Most consumers have paid for apps costing $1.99 or less
                                                                              • Figure 28: Amount paid for mobile apps August 2013-March 2014
                                                                            • Men aged 35-54 spend the most on apps
                                                                                • Figure 29: Amount paid for mobile apps, by gender and age, August 2013-March 2014
                                                                              • Tablet users showcase higher mobile app spending than smartphone users
                                                                                  • Figure 30: Amount paid for mobile apps (mean), by types of apps used on smartphones and tablets, August 2013-March 2014
                                                                              • Time Spent Using Mobile Apps

                                                                                • Key points
                                                                                  • More than half of consumers exhibit light mobile app usage
                                                                                    • Figure 31: Time spent using smartphone apps, by gender and age, June 2014
                                                                                  • Those who download paid apps exhibit heavier app usage
                                                                                    • Figure 32: Time spent using smartphone apps by number of app downloads and deletions, June 2014
                                                                                  • Highly engaged tablet users most often use apps at home
                                                                                    • Figure 33: Incidence of using mobile apps at home by time spent using mobile apps, June 2014
                                                                                  • Twitter, LinkedIn, Pinterest, and YouTube users show elevated mobile app usage
                                                                                    • Figure 34: Time spent using smartphone apps, by visits social media websites at least once per day, June 2014
                                                                                • Mobile App Discovery Habits

                                                                                  • Key points
                                                                                    • One third of app users know which app they want before they start looking
                                                                                      • Figure 35: Consumers' mobile app discovery habits, by gender and age, June 2014
                                                                                    • Receptiveness to in-app advertising shows little variance with household income
                                                                                      • Figure 36: Consumers' mobile app discovery habits, by household income, June 2014
                                                                                    • Frequent app downloaders are more receptive to ads
                                                                                      • Figure 37: Consumers' mobile app discovery habits, by number of app downloads and deletions – More than 5, June 2014
                                                                                  • Consumers’ Opinions and Usage Habits Regarding Mobile Apps

                                                                                    • Key points
                                                                                      • Mobile apps most likely to be used at home
                                                                                        • Figure 38: Opinions regarding mobile apps, June 2014
                                                                                      • One fourth of men and women aged 18-34 spend most of their online time on mobile
                                                                                          • Figure 39: Opinions regarding mobile apps, by gender and age, June 2014
                                                                                        • Consumers from large households are more likely to spend their online time on mobile
                                                                                          • Figure 40: Opinions regarding mobile apps, by household size, June 2014
                                                                                      • Payment Methods Used to Buy Apps and Premium Features

                                                                                        • Key points
                                                                                          • Online payment services, credit cards top consumers’ preferred payment methods
                                                                                            • Figure 41: Consumers' mobile app payment preferences, June 2014
                                                                                          • Payment methods used
                                                                                            • 18-34-year-olds open to a variety of payment options
                                                                                              • Figure 42: Consumers' mobile app payment preferences – I have used this method of payment and would use it again, by gender and age, June 2014
                                                                                            • Willingness to use payment methods
                                                                                              • One fourth of app users show interest in mobile payment apps
                                                                                                • Figure 43: Consumers' mobile app payment preferences – I have not used this but I would consider it, by gender and age, June 2014
                                                                                            • Race and Hispanic Origin

                                                                                              • Key points
                                                                                                • Android is particularly popular among Blacks
                                                                                                  • Figure 44: Mobile devices used, by race/Hispanic origin, June 2014
                                                                                                • Gaming and weather apps show widespread usage
                                                                                                  • Figure 45: Types of mobile apps used, by race/Hispanic origin, August 2013-March 2014
                                                                                                • Hispanics show elevated concern about apps’ data usage
                                                                                                  • Figure 46: Opinions regarding mobile apps, by race/Hispanic origin, June 2014
                                                                                              • Appendix – Other Useful Consumer Tables

                                                                                                • Mobile devices used
                                                                                                  • Figure 47: Mobile devices used most often, by gender and age, June 2014
                                                                                                  • Figure 48: Mobile devices used most often, by household income, June 2014
                                                                                                  • Figure 49: Mobile devices used most often, by household size, June 2014
                                                                                                  • Figure 50: Mobile devices also used, by race/Hispanic origin, June 2014
                                                                                                • Types of mobile apps used
                                                                                                  • Figure 51: Mobile app usage, August 2013-March 2014
                                                                                                  • Figure 52: Types of mobile apps used, by gender and age, August 2013-March 2014
                                                                                                  • Figure 53: Types of mobile apps used on cell phone or smartphone, by race/Hispanic origin, August 2013-March 2014
                                                                                                  • Figure 54: Types of mobile apps used on cell phone or smartphone, by household income, August 2013-March 2014
                                                                                                  • Figure 55: Types of mobile apps used on tablets, by age, August 2013-March 2014
                                                                                                  • Figure 56: Types of mobile apps used on tablets, by race/Hispanic origin, August 2013-March 2014
                                                                                                  • Figure 57: Types of mobile apps used on tablets, by household income, August 2013-March 2014
                                                                                                • Payment for mobile apps
                                                                                                  • Figure 58: Incidence of paying for a mobile app, by race/Hispanic origin, August 2013-March 2014
                                                                                                  • Figure 59: Incidence of paying for a mobile app, by household income, August 2013-March 2014
                                                                                                  • Figure 60: Amount paid for mobile apps, by household income, August 2013-March 2014
                                                                                                • Lifestyles and the internet
                                                                                                  • Figure 61: Lifestyles and the internet, by age, August 2013-March 2014
                                                                                                  • Figure 62: Lifestyles and the internet, by race/Hispanic origin, August 2013-March 2014
                                                                                                  • Figure 63: Lifestyles and the internet, by household income, August 2013-March 2014
                                                                                                • Time spent using mobile apps
                                                                                                  • Figure 64: Time spent using tablet apps, by gender and age, June 2014
                                                                                                  • Figure 65: Time spent using tablet apps, by race/Hispanic origin, June 2014
                                                                                                  • Figure 66: Time spent using tablet apps, by number of app downloads and deletions, June 2014
                                                                                                  • Figure 67: Time spent using smartphone apps, by race/Hispanic origin, June 2014
                                                                                                  • Figure 68: Time spent using smartphone apps, by visits social media websites at least once per day, June 2014
                                                                                                  • Figure 69: Time spent using smartphone apps, by visits social media websites at least once per day, June 2014
                                                                                                  • Figure 70: Time spent using smartphone apps, by number of app downloads and deletions, June 2014
                                                                                                • Number of app downloads and deletions
                                                                                                  • Figure 71: Number of app downloads and deletions – Downloaded free app(s), by gender and age, June 2014
                                                                                                  • Figure 72: Number of app downloads and deletions – Downloaded free app(s), by household income, June 2014
                                                                                                  • Figure 73: Number of app downloads and deletions – Downloaded free app(s), by race/Hispanic origin, June 2014
                                                                                                  • Figure 74: Number of app downloads and deletions – Downloaded free app(s), by time spent using mobile apps – Tablet apps, June 2014
                                                                                                  • Figure 75: Number of app downloads and deletions – Downloaded free app(s), by time spent using mobile apps – Smartphone apps, June 2014
                                                                                                  • Figure 76: Number of app downloads and deletions – Downloaded paid app(s), by gender and age, June 2014
                                                                                                  • Figure 77: Number of app downloads and deletions – Downloaded paid app(s), by household income, June 2014
                                                                                                  • Figure 78: Number of app downloads and deletions – Downloaded paid app(s), by race/Hispanic origin, June 2014
                                                                                                  • Figure 79: Number of app downloads and deletions – Downloaded paid app(s), by household size, June 2014
                                                                                                  • Figure 80: Number of app downloads and deletions – Downloaded paid app(s), by time spent using mobile apps – Tablet apps, June 2014
                                                                                                  • Figure 81: Number of app downloads and deletions – Downloaded paid app(s), by time spent using mobile apps – Smartphone apps, June 2014
                                                                                                  • Figure 82: Number of app downloads and deletions – Purchased additional features or premium content for an app (ie in-app purchases), by gender and age, June 2014
                                                                                                  • Figure 83: Number of app downloads and deletions – Purchased additional features or premium content for an app (ie in-app purchases), by time spent using mobile apps – Tablet apps, June 2014
                                                                                                  • Figure 84: Number of app downloads and deletions – Purchased additional features or premium content for an app (ie in-app purchases), by time spent using mobile apps – Smartphone apps, June 2014
                                                                                                  • Figure 85: Incidence of paying for premium features, by number of app downloads and deletions, June 2014
                                                                                                  • Figure 86: Number of app downloads and deletions – Deleted or removed app(s), by gender and age, June 2014
                                                                                                  • Figure 87: Number of app downloads and deletions – Deleted or removed app(s), by household income, June 2014
                                                                                                  • Figure 88: Number of app downloads and deletions – Deleted or removed app(s), by race/Hispanic origin, June 2014
                                                                                                  • Figure 89: Number of app downloads and deletions – Deleted or removed app(s), by household size, June 2014
                                                                                                  • Figure 90: Number of app downloads and deletions – Deleted or removed app(s), by time spent using mobile apps – Tablet apps, June 2014
                                                                                                  • Figure 91: Number of app downloads and deletions – Deleted or removed app(s), by time spent using mobile apps – Smartphone apps, June 2014
                                                                                                  • Figure 92: Number of app downloads and deletions – downloaded paid apps, by number of app downloads and deletions, June 2014
                                                                                                  • Figure 93: Number of premium features downloaded, by device used most often, June 2014
                                                                                                • Amount paid for mobile apps
                                                                                                  • Figure 94: Amount paid for mobile and tablet apps – Apps for cell phones or smartphones, August 2013-March 2014
                                                                                                  • Figure 95: Amount paid for mobile and tablet apps – Apps for cell phones or smartphones, August 2013-March 2014 (continued)
                                                                                                  • Figure 96: Amount paid for mobile and tablet apps – Apps for cell phones or smartphones, August 2013-March 2014 (continued)
                                                                                                  • Figure 97: Amount paid for mobile and tablet apps – Apps for cell phones or smartphones, August 2013-March 2014 (continued)
                                                                                                  • Figure 98: Amount paid for mobile and tablet apps – Apps for tablets, August 2013-March 2014
                                                                                                  • Figure 99: Amount paid for mobile and tablet apps – Apps for tablets, August 2013-March 2014(continued)
                                                                                                  • Figure 100: Amount paid for mobile and tablet apps – Apps for tablets, August 2013-March 2014(continued)
                                                                                                  • Figure 101: Amount paid for mobile and tablet apps – Apps for tablets, August 2013-March 2014(continued)
                                                                                                • Preferred payment methods for mobile apps
                                                                                                  • Figure 102: Consumers' mobile app payment preferences, June 2014
                                                                                                  • Figure 103: Consumers' mobile app payment preferences – I have used this method of payment and would use it again, by household income, June 2014
                                                                                                  • Figure 104: Consumers' mobile app payment preferences – I have used this method of payment and would use it again, by race/Hispanic origin, June 2014
                                                                                                  • Figure 105: Consumers' mobile app payment preferences – I have used this method of payment and would use it again, by household size, June 2014
                                                                                                  • Figure 106: Consumers' mobile app payment preferences – I have used this method of payment and would use it again, by time spent using mobile apps – Tablet apps, June 2014
                                                                                                  • Figure 107: Consumers' mobile app payment preferences – I have used this method of payment and would use it again, by time spent using mobile apps – Smartphone apps, June 2014
                                                                                                  • Figure 108: Consumers' mobile app payment preferences – I have used this method of payment and would use it again, by number of app downloads and deletions, June 2014
                                                                                                  • Figure 109: Consumers' mobile app payment preferences – I have not used this but I would consider it, by household income, June 2014
                                                                                                  • Figure 110: Consumers' mobile app payment preferences – I have not used this but I would consider it, by race/Hispanic origin, June 2014
                                                                                                  • Figure 111: Consumers' mobile app payment preferences – I have not used this but I would consider it, by household size, June 2014
                                                                                                  • Figure 112: Consumers' mobile app payment preferences – I have not used this but I would consider it, by time spent using mobile apps – Tablet apps, June 2014
                                                                                                  • Figure 113: Consumers' mobile app payment preferences – I have not used this but I would consider it, by time spent using mobile apps – Smartphone apps, June 2014
                                                                                                  • Figure 114: Consumers' mobile app payment preferences – I have not used this but I would consider it, by number of app downloads and deletions, June 2014
                                                                                                • Mobile application discovery habits and opinions
                                                                                                  • Figure 115: Consumers' mobile app discovery habits, by household size, June 2014
                                                                                                  • Figure 116: Consumers' mobile app discovery habits, by time spent using mobile apps – Tablet apps, June 2014
                                                                                                  • Figure 117: Consumers' mobile app discovery habits, by time spent using mobile apps – Smartphone apps, June 2014
                                                                                                  • Figure 118: Consumers' mobile app discovery habits, by number of app downloads and deletions, June 2014
                                                                                                • Opinions regarding mobile apps
                                                                                                  • Figure 119: Opinions regarding mobile apps, by household income, June 2014
                                                                                                  • Figure 120: Opinions regarding mobile apps, by time spent using mobile apps – Smartphone apps, June 2014
                                                                                                  • Figure 121: Opinions regarding mobile apps, by number of app downloads and deletions, June 2014
                                                                                                  • Figure 122: Opinions regarding mobile apps, by number of app downloads and deletions – More than 5, June 2014
                                                                                              • Appendix – Trade Associations

                                                                                                Companies Covered

                                                                                                To learn more about the companies covered in this report please contact us.

                                                                                                Mobile Apps - US - October 2014

                                                                                                US $3,995.00 (Excl.Tax)