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Mobile Phone and Tablet Apps - UK - October 2015

"The lion's share of app revenue in the UK market comes from free apps with either in-app purchases or in-app advertising. The abundance of free apps in these different forms means that paid apps account for a relatively small proportion of the market value-wise and many will look for feature-lite versions they can try before they buy. However, there are still many opportunities in the paid market for apps, particularly if backed up by a strong brand name."
– Fergal McGivney, Travel and Technology Analyst

This report covers the following areas:

  • Revenue generated by the paid and freemium models 
  • Data sharing attitudes of consumers using apps
  • Openness to in-app advertising
  • App download influences 

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Table of contents

  1. Overview

    • What you need to know
      • Scope of the report
      • Executive Summary

          • The market
            • Market size, segmentation, and share
              • Figure 1: Value of application sales and in-app purchases from the iOS App Store and the Google Play store in the UK, 2012-15 (est)
            • The freemium model increases its revenue share
              • Figure 2: iOS App Store and Google Play store UK revenue, by revenue model, July 2014
            • Apple dominates the revenue stakes
              • Figure 3: App store revenue split for iOS App Store and Google Play, by country, July 2015
            • The rise of smartphones: a bigger audience for adverts
              • Figure 4: Ownership of mobile phones, by type of phone, January 2012-June 2015
            • The consumer
              • Android dominates smartphones, iOS dominates tablets
                • Figure 5: Operating system on mobile device, July 2015
              • Men more likely to be high-frequency downloaders
                • Figure 6: Number of free apps downloaded, July 2015
              • In-depth games with a strong brand name suit the paid app market
                • Figure 7: Number of paid apps downloaded on smartphone, tablet, or smartwatch, July 2015
              • Brands need to reassure consumers about app data protection
                • Figure 8: Openness to sharing data, July 2015
              • Consumers somewhat open to adverts in free apps
                • Figure 9: Attitudes towards advertisements in apps, July 2015
              • Peer recommendations biggest influencer for app downloads
                • Figure 10: App download influences, July 2015
              • What we think
              • Issues and Insights

                • The freemium model can boost downloads, increase revenue, and offer a degree of customisation
                  • The facts
                    • The implications
                      • Younger consumers the most open to in-app advertising
                        • The facts
                          • The Implications
                          • The Market – What You Need To Know

                            • Market continues to grow but at a slower rate
                              • Freemium apps are the most lucrative app monetisation strategy
                                • The iOS App Store pulls in the most revenue
                                  • The near ubiquitous smartphone opens up in-app advertising potential
                                    • The rise in tablet ownership is good for entertainment apps
                                    • Market Size, Segmentation and Share

                                      • UK app market still growing but at a slower rate
                                        • Figure 11: Value of smartphone and tablet application sales and in-app purchases from the iOS App Store and the Google Play Store in the UK, 2012-15 (est)
                                      • In-app purchase model dominates revenue generation
                                        • Figure 12: iOS App Store and Google Play store UK smartphone and tablet app revenue, by revenue model, July 2014
                                        • Figure 13: Top grossing free smartphone and tablet apps from the UK iOS App Store, September 2015
                                        • Figure 14: Top grossing free smartphone and tablet apps in the UK Google Play store, September 2015
                                      • The UK app market remains strong
                                        • iOS apps dominate revenue worldwide despite the higher volume of Android downloads
                                          • Figure 15: App store revenue split for iOS App Store and Google Play, by country, July 2015
                                      • Market Drivers

                                        • Smartphones approaching near ubiquity among Millennials
                                          • Figure 16: Ownership of mobile phones, by type of phone, January 2012-June 2015
                                          • Figure 17: Personal ownership of smartphones, tablets, and smartwatches among UK consumers, June 2015
                                        • Tablets replacing desktops offer potential for entertainment apps
                                          • Figure 18: Household ownership of computers, by type, January 2012-June 2015
                                        • Low penetration of smartwatches, but opportunities are there
                                          • Figure 19: Ownership of smartwatches, June 2014-June 2015
                                        • Bigger screens are good news for app developers
                                          • Figure 20: Ownership of smartphones, by screen size, June 2015
                                        • Apple’s Swift language eases the pain of coding for developers
                                        • The Consumer – What You Need To Know

                                          • Android is most popular for smartphones
                                            • Men are more likely to be high frequency downloaders
                                              • Young men most likely to download paid apps but free demos still crucial
                                                • Consumers are wary of sharing their data with apps
                                                  • Most consumers accept adverts in free apps
                                                    • The Internet of Things (IoT) can be a major benefit for app developers
                                                      • Peer recommendations are the biggest driver of downloads
                                                        • Women are more likely than men to use the top three most common types of app
                                                        • Operating System on Mobile Devices

                                                          • Most smartphones run Android while iOS is most popular for tablets
                                                            • Figure 21: Operating system on mobile device, July 2015
                                                          • Can Apple entice Android users over to iOS 9 with its new app?
                                                            • App building strategies; which platforms will reach most consumers?
                                                              • Figure 22: Operating systems across all mobile devices, July 2015
                                                            • Android development offers low barriers to entry for developers
                                                              • iOS offers a more lucrative customer base
                                                                • Windows Phone users key for productivity apps
                                                                • Number of Free Apps Downloaded

                                                                  • Free apps as a tool to boost customer loyalty
                                                                    • Men most likely to be high-frequency downloaders
                                                                      • Figure 23: Number of Free Apps Downloaded on any device, July 2015
                                                                    • Apps can enhance the TV viewing experience
                                                                      • Big screen apps on the horizon as Apple rolls out the Apple TV app store
                                                                        • Tech-savvy smartwatch owners are ultra-high frequency downloaders
                                                                          • Monetisation of free apps: the IAP model
                                                                            • The IAP model for non-gaming apps
                                                                            • Number of Paid Apps Downloaded

                                                                                • Figure 24: Top paid apps on the Apple iTunes stores, September 2015
                                                                                • Figure 25: Top paid apps on the Google Play store, September 2015
                                                                              • Young men using iOS are the key target group
                                                                                • Figure 26: Number of paid apps downloaded, July 2015
                                                                              • People avoid paid apps that don’t have free feature-lite downloads
                                                                                • Figure 27: Behaviours related to feature-lite versions of paid apps, July 2015
                                                                              • Smartwatch owners as early adopters
                                                                              • Openness to Sharing Data with Apps

                                                                                  • Data sharing with apps for commercial purposes
                                                                                    • Figure 28: Openness to sharing data, July 2015
                                                                                  • Consumers trust websites more than apps with their data
                                                                                    • Figure 29: Consumer attitudes towards data sharing in apps and websites, July 2015
                                                                                    • Figure 30: Consumer attitudes towards data sharing in apps and websites, by generation, July 2015
                                                                                  • Why location and shopping data can go hand in hand
                                                                                    • Self-tracking apps can be key in encouraging consumers to share data
                                                                                      • Figure 31: Usage of fitness apps, by age group, July 2015
                                                                                  • Attitudes towards Advertisements in Apps

                                                                                    • In-app ad revenue growing as fast as IAPs
                                                                                      • In-app advertisements have a strong position in the UK market
                                                                                        • Figure 32: Attitudes towards Advertisements in Apps, July 2015
                                                                                      • Students prefer to see in-app adverts rather than pay
                                                                                        • Figure 33: Attitudes towards advertisements in Apps, by age group, July 2015
                                                                                      • Frame in-app adverts as rewards
                                                                                        • The rise of ad-blockers
                                                                                        • Attitudes towards Apps

                                                                                          • Mobile apps set to offer consumers greater control over their environment
                                                                                            • Figure 34: How the Internet of Things connects the home
                                                                                          • Companies can leverage apps for efficient customer care
                                                                                            • Limited appeal for smartwatch apps but buzz around wearable tech could change perceptions
                                                                                              • Brands should encourage ‘app gifting’
                                                                                                • Figure 35: Consumer attitudes to mobile apps, July 2015
                                                                                            • Download Influences

                                                                                              • Recommendations from friends and family the top influencer
                                                                                                • Figure 36: App download influences, July 2015
                                                                                              • Female downloaders more likely to be influenced by word of mouth
                                                                                              • Types of Apps Used

                                                                                                • Women most likely to use top three apps genres
                                                                                                  • Figure 37: Types of apps used, July 2015
                                                                                                • Most consumers use an average of 1 to 3 app types
                                                                                                  • Figure 38: Repertoire of types of apps used, July 2015
                                                                                                  • Figure 39: OS used by high frequency users (ie who use 8+ types of apps), by OS, July 2015
                                                                                              • Appendix – Data Sources, Abbreviations, and Supporting Information

                                                                                                  • Abbreviations

                                                                                                  Companies Covered

                                                                                                  • Apple Computer UK Ltd
                                                                                                  • Google, Inc.

                                                                                                  Mobile Phone and Tablet Apps - UK - October 2015

                                                                                                  £1,995.00 (Excl.Tax)