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Mobile Device Apps - UK - October 2014

“In the short term, in the UK at least, developers on iOS will likely earn more money than those on competing app stores. In the longer term though, porting any content to Android should be a priority; not least because Google is strongly pushing into emerging markets under the Android One scheme, which will place inexpensive smartphones – the company hopes – into the hands of ‘the next five billion’ people.”
– Samuel Gee, Senior Technology and Media Analyst

This report will discuss the following key topics:

  • Low-income consumers do not participate in in-app purchases (IAPs)
  • Which app stores should developers target?

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Table of contents

  1. 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

                                                                                                                      Companies Covered

                                                                                                                      • Amazon.com Inc
                                                                                                                      • Apple Computer UK Ltd
                                                                                                                      • Google, Inc.
                                                                                                                      • HTC
                                                                                                                      • Microsoft Corporation
                                                                                                                      • Nokia Corporation (UK)
                                                                                                                      • Research in Motion Uk Ltd.
                                                                                                                      • Samsung Electronics

                                                                                                                      Mobile Device Apps - UK - October 2014

                                                                                                                      £1,995.00 (Excl.Tax)