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Mobile Device Apps - UK - November 2017

“Software and hardware innovation is creating new ways the consumer can engage with mobile apps. In particular, apps are increasingly able to link virtual behaviour with the physical environment. This will lead to new opportunities for people to interact with services and brands, and opportunities for market players to monetise these interactions using sponsorships and real-world partnerships.”
– Andrew Moss, Technology Analyst

This Report looks at the following areas:

  • App innovation led by digital assistants, augmented reality, and artificial intelligence
  • Opportunities for monetisation

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this report
      • Executive Summary

          • The market
            • New monetisation opportunities lead to steady growth
              • 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
                • 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
                  • Figure 5: Operating system share by device type, July 2017
                • iOS users show more regular app usage
                  • Figure 6: Self-reported app usage, by operating system ownership, July 2017
                  • Figure 7: Self-reported app spend, by operating system ownership, July 2017
                • Tablets increase app engagement and purchasing
                  • 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
                    • 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
                      • Figure 10: Situations in which people would be happy to use voice commands to control devices, April 2017
                    • What we think
                    • Issues and Insights

                      • 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

                                  • 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

                                              • New monetisation opportunities lead to steady growth
                                                • Figure 11: Gross mobile app revenue for iOS and Google Play Store, 2012-22
                                                • 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
                                                  • 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

                                                  • Smartphone and tablet ownership remains stable as smartwatch ownership rises
                                                    • 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

                                                          • 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

                                                                  • 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

                                                                                • Entertainment & Leisure apps most advertised
                                                                                  • Figure 16: Total above-the line, online display, and direct mail advertising expenditure on mobile apps, by app category, 2016
                                                                                  • 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
                                                                                    • 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

                                                                                    • 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

                                                                                                • Android reaches the greatest proportion of mobile device owners
                                                                                                  • Figure 19: Operating system reach to device owners (either smartphone or tablet), July 2017
                                                                                                • Market share across type of device
                                                                                                  • Figure 20: Operating system share by device type, July 2017
                                                                                                • Operating system key demographics
                                                                                                    • Figure 21: Operating system reach to device owners (either smartphone or tablet) by age, July 2017
                                                                                                • Engagement and Spending Across Users

                                                                                                  • iOS users show more regular app usage
                                                                                                    • Figure 22: Self-reported app usage, by operating system ownership, July 2017
                                                                                                    • Figure 23: Self-reported app spend, by operating system ownership, July 2017
                                                                                                  • Tablets increase app engagement and purchasing
                                                                                                      • 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
                                                                                                      • Figure 26: Self-reported app spend, by age, July 2017
                                                                                                  • App Usage

                                                                                                    • Messaging and social media dominate app use
                                                                                                      • Figure 27: Self-reported app category use amongst app users, July 2017
                                                                                                    • Gaming a popular throwaway activity for casual users
                                                                                                      • Figure 28: Self-reported app category use amongst app users, by number of app categories, July 2017
                                                                                                  • Attitudes towards Apps

                                                                                                    • App users are concerned about data sharing…
                                                                                                      • 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
                                                                                                          • Figure 30: Self-reported app usage, by access to device type, July 2017
                                                                                                        • Consumers want multi-functional apps
                                                                                                        • App Features

                                                                                                          • AR, digital assistants and location-based services
                                                                                                            • 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
                                                                                                                    • 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

                                                                                                                    • Abbreviations
                                                                                                                      • Consumer research methodology
                                                                                                                      • Appendix – Market Size and Forecast

                                                                                                                        • Forecast methodology
                                                                                                                            • Figure 33: Best- and worst-case forecast for iOS and Google Play Store revenue, 2017-22

                                                                                                                        Mobile Device Apps - UK - November 2017

                                                                                                                        US $2,648.76 (Excl.Tax)