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Mobile Phone Apps - UK - June 2012

“A number of developers have been experimenting with web applications over 2011 and into 2012. These applications serve three primary purposes: to provide a unified user experience across platforms; to retain control of customer information and the customer journey; and to avoid paying a service charge to the owner of the smartphone or tablet ecosystem on which a native application might be hosted. Mobile-optimised websites will not be appropriate for every offering, but they are likely to increase dramatically in number over 2012 and 2013 as web technologies become more powerful.”

– Samuel Gee, technology analyst

Some questions answered in this report include:

  • How can developers approach consumers who will only download free apps?
  • How will the predicted growth of Windows Phone 7 devices change the market?
  • Will tablets change how developers interact with smartphone applications?
  • Are web applications likely to supplant dedicated device applications?

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Table of contents

  1. Introduction

      • Definitions
          • Figure 1: Application stores, operating system and ecosystem owners, May 2012
        • Abbreviations
        • Executive Summary

            • The market
              • Figure 2: Worldwide smartphone application revenue, 2011
            • Market factors
              • Use of smartphones and tablets as second screens
                • Mobile websites drive greater engagement rates
                  • Rise in use of social applications
                    • The consumer
                      • Figure 3: Smartphone ownership, by operating system, March 2012
                      • Figure 4: Amount spent on mobile device applications, March 2012
                      • Figure 5: Amount spent on mobile device in-app purchases in the last 12 months, March 2012
                      • Figure 6: Attitudes towards mobile device applications, March 2012
                    • What we think
                    • Issues in the Market

                        • How can developers approach consumers who will only download free apps?
                          • How will the predicted growth of Windows Phone 7 devices change the market?
                            • Will tablets change how developers interact with smartphone applications?
                              • Are web applications likely to supplant dedicated device applications?
                              • Future Opportunities

                                • Inspire Insights
                                  • Trend: Many Mes
                                    • Trend: Extend My Brand
                                      • 2015 Trend: Old Gold
                                      • Internal Market Environment

                                        • Key points
                                          • Smartphone and tablet penetration
                                            • Figure 7: Ownership of tablets and smartphones, 2011 and 2012
                                            • Figure 8: Total applications available for download, by manufacturer, worldwide, January 2012
                                          • 15% only download free apps
                                            • Figure 9: Consumers who have downloaded applications onto any mobile device in the last 12 months, 2011
                                          • Social apps overtake gaming apps for the first time
                                            • Figure 10: Daily average smartphone application consumption, by minutes per category per user, worldwide, Q1 2011 and Q1 2012
                                          • Content producers seek to avoid environment charges by moving to web-based alternatives
                                            • New opportunities apparent in dual screening
                                              • Application sales can be spurred by careful hardware manipulation
                                                • Mobile websites drive greater engagement rates
                                                  • Discoverability and competition problems give rise to umbrella applications
                                                    • Facebook launches its own application store
                                                    • Broader Market Environment

                                                      • Key points
                                                        • Consumer confidence remains low
                                                          • Figure 11: GfK NOP Consumer Confidence Index, January 2008-April 2012
                                                        • Older consumers will provide a market for targeted applications
                                                          • Figure 12: Trends in the age structure of the UK population, 2006-16
                                                        • Trial rollout of LTE may help data-heavy applications
                                                        • Who’s Innovating?

                                                          • Key points
                                                            • Gesture-controlled cooking application accounts for dirty fingers
                                                              • Science Festival application attempts to influence dreams
                                                                • Application used to control and track concept bike
                                                                  • Barclays money transfer application brings secure functionality to smartphones
                                                                  • Market Overview

                                                                    • Key points
                                                                      • In-app purchase revenue under 50% of download revenue in 2011
                                                                        • Figure 13: Global download revenue and in-app purchase revenue for smartphone applications, 2011
                                                                      • Apple and Android largest stores
                                                                        • Figure 14: Total number of applications per app store, December 2008-May 2012
                                                                      • Windows Marketplace has biggest year-on-year growth
                                                                        • Figure 15: Year-on-year growth of application stores, measured by number of applications available, May 2011-May 2012
                                                                      • Windows Marketplace growth triggers large swing in free/paid divide
                                                                        • Figure 16: Split of free and paid applications, May 2012
                                                                        • Figure 17: Split of free and paid applications, May 2011
                                                                      • BlackBerry App World
                                                                        • Windows Phone Marketplace
                                                                          • Nokia Ovi Store
                                                                            • Apple App Store
                                                                              • Android Marketplace/Google Play
                                                                              • Market Segmentation

                                                                                • Key points
                                                                                  • Apple owners most engaged, but app users most likely to have Google phones
                                                                                    • Figure 18: Usage of a smartphone-based application within the last three months, by smartphone operating system, May 2012
                                                                                    • Figure 19: Smartphone operating system, by usage of a smartphone-based application within the last three months, May 2012
                                                                                  • iTunes keeps attention on applications whilst at the PC
                                                                                    • Figure 20: Origin of applications used within the last three months, by smartphone operating system, May 2012
                                                                                  • Harder core of users missing for Nokia and RIM
                                                                                    • Figure 21: Number of smartphone applications downloaded per month, by smartphone operating system, May 2012
                                                                                  • iOS smartphone owners high-volume downloaders
                                                                                    • Figure 22: Number of applications downloaded onto a smartphone per month in the last three months, by smartphone operating system, May 2012
                                                                                • Application Category Usage

                                                                                    • Key points
                                                                                      • Figure 23: Usage of application categories across all smartphone owners, May 2012
                                                                                    • News and information-related applications
                                                                                      • Figure 24: Access of news and information applications, by smartphone operating system, May 2012
                                                                                      • Figure 25: Average proportion of news and information applications accessed, by smartphone operating system, May 2012
                                                                                    • Leisure applications
                                                                                      • Figure 26: Access of leisure applications, by smartphone operating system, May 2012
                                                                                      • Figure 27: Average proportion of leisure applications accessed, by smartphone operating system, May 2012
                                                                                    • Financial applications
                                                                                      • Figure 28: Access of financial applications, by smartphone operating system, May 2012
                                                                                      • Figure 29: Average proportion of financial applications accessed, by smartphone operating system, May 2012
                                                                                    • Shopping applications
                                                                                      • Figure 30: Access of financial applications, by smartphone operating system, May 2012
                                                                                      • Figure 31: Average proportion of shopping applications accessed, by smartphone operating system, May 2012
                                                                                    • Local area applications
                                                                                      • Figure 32: Access of applications related to a local area, by smartphone operating system, May 2012
                                                                                      • Figure 33: Average proportion of local area applications accessed, by smartphone operating system, May 2012
                                                                                    • Social applications
                                                                                      • Figure 34: Access of applications related to social themes, by smartphone operating system, May 2012
                                                                                      • Figure 35: Average proportion of social applications accessed, by smartphone operating system, May 2012
                                                                                    • Averages
                                                                                      • Figure 36: Smartphone operating system, by usage of category type applications, May 2012
                                                                                  • Companies and Products

                                                                                      • Apple Inc. (iOS)
                                                                                        • Google (Android)
                                                                                          • Microsoft (Windows Phone 7)
                                                                                            • Nokia (Symbian)
                                                                                              • Research In Motion (BlackBerry)
                                                                                              • Smartphone Ownership

                                                                                                • Key points
                                                                                                  • Consumers claiming calls or phones from work favour iOS
                                                                                                    • Figure 37: Smartphone operating systems, by the person who pays for smartphone usage, May 2012
                                                                                                  • Low earners favour Android handsets
                                                                                                    • Figure 38: Smartphone operating systems, by gross annual household income, May 2012
                                                                                                  • Youth ownership of BlackBerry is high
                                                                                                    • Figure 39: Smartphone operating system, by age, May 2012
                                                                                                • Amount Spent On Applications

                                                                                                  • Key points
                                                                                                    • Majority of consumers still relying on free applications
                                                                                                      • Figure 40: Amount spent on applications, March 2012
                                                                                                    • 25-34s likely to spend more
                                                                                                      • Figure 41: Amount spent on mobile device applications in the last 12 months, by age, March 2012
                                                                                                    • iOS users spend more
                                                                                                      • Figure 42: Amount spent on mobile device applications in the last 12 months, by smartphone operating system, March 2012
                                                                                                  • Amount Spent through In-App Purchases

                                                                                                    • Key points
                                                                                                      • In-app purchases have yet to reach high levels of usage
                                                                                                        • Figure 43: Amount spent on application purchases in the last 12 months, March 2012
                                                                                                      • Minor variations by age and gender
                                                                                                        • Figure 44: In-app purchases, by gender and age, March 2012
                                                                                                      • Tablet ownership bucks expected trend for in-app spending
                                                                                                        • Figure 45: Levels of in-app spending over the last 12 months, by smartphone and tablet operating system, March 2012
                                                                                                    • Attitudes towards Mobile Applications

                                                                                                      • Key points
                                                                                                        • Word of mouth and random browsing most used methods of app discovery
                                                                                                          • Figure 46: Attitudes towards mobile applications, March 2012
                                                                                                        • Just over a fifth dislike handing out credit card details to ecosystem owners to buy apps
                                                                                                          • Just under a fifth prefer to use an application to the mobile web
                                                                                                            • Application availability most important to younger consumers
                                                                                                              • Figure 47: Agreement with the statement ‘Availability of apps was a major factor in my choice of handset’, by age, March 2012
                                                                                                          • CHAID Analysis

                                                                                                            • Methodology
                                                                                                              • Women with relatively high incomes most likely to take application recommendations
                                                                                                                • Figure 48: Mobile Applications – CHAID – Tree output, March 2012
                                                                                                                • Figure 49: Mobile Applications – CHAID – Table output, March 2012
                                                                                                            • Appendix – Smartphone Ownership

                                                                                                                • Figure 50: Smartphone ownership, March 2012
                                                                                                                • Figure 51: Tablet ownership, by smartphone ownership, March 2012
                                                                                                                • Figure 52: Smartphone ownership, by demographics, March 2012
                                                                                                            • Appendix – Tablet Ownership

                                                                                                                • Figure 53: Tablet ownership, March 2012
                                                                                                                • Figure 54: Smartphone ownership, by tablet ownership, March 2012
                                                                                                                • Figure 55: Tablet ownership, by demographics, March 2012
                                                                                                            • Appendix – Portable Media Player Ownership

                                                                                                                • Figure 56: Portable media player ownership, March 2012
                                                                                                                • Figure 57: Portable media player ownership, by demographics, March 2012
                                                                                                            • Appendix – Amount Spent On Applications

                                                                                                                • Figure 58: Amount spent on applications, March 2012
                                                                                                                • Figure 59: Amount spent on applications, by smartphone ownership, March 2012
                                                                                                                • Figure 60: Amount spent on applications, by tablet ownership, March 2012
                                                                                                                • Figure 61: Amount spent on applications, by portable media player ownership, March 2012
                                                                                                                • Figure 62: Amount spent on applications, by demographics, March 2012
                                                                                                            • Appendix – Amount Spent through In-App Purchases

                                                                                                                • Figure 63: Amount spent on in-app purchases, March 2012
                                                                                                                • Figure 64: Amount spent on in-app purchases, by smartphone ownership, March 2012
                                                                                                                • Figure 65: Amount spent on in-app purchases, by tablet ownership, March 2012
                                                                                                                • Figure 66: Amount spent on in-app purchases, by portable media player ownership, March 2012
                                                                                                                • Figure 67: Amount spent on in-app purchases, by amount spent on applications, March 2012
                                                                                                                • Figure 68: Amount spent on in-app purchases, by demographics, March 2012
                                                                                                            • Appendix – Attitudes Towards Mobile Applications

                                                                                                                • Figure 69: Attitudes towards mobile applications, March 2012
                                                                                                                • Figure 70: Smartphone ownership, by most popular attitudes towards mobile applications, March 2012
                                                                                                                • Figure 71: Smartphone ownership, by next most popular attitudes towards mobile applications, March 2012
                                                                                                                • Figure 72: Tablet ownership, by most popular attitudes towards mobile applications, March 2012
                                                                                                                • Figure 73: Tablet ownership, by next most popular attitudes towards mobile applications, March 2012
                                                                                                                • Figure 74: Portable media player ownership, by most popular attitudes towards mobile applications, March 2012
                                                                                                                • Figure 75: Portable media player ownership, by next most popular attitudes towards mobile applications, March 2012
                                                                                                                • Figure 76: Amount spent on applications, by most popular attitudes towards mobile applications, March 2012
                                                                                                                • Figure 77: Amount spent on applications, by next most popular attitudes towards mobile applications, March 2012
                                                                                                                • Figure 78: Amount spent on in-app purchases, by most popular attitudes towards mobile applications, March 2012
                                                                                                                • Figure 79: Amount spent on in-app purchases, by next most popular attitudes towards mobile applications, March 2012
                                                                                                                • Figure 80: Attitudes towards mobile applications, by most popular attitudes towards mobile applications, March 2012
                                                                                                                • Figure 81: Attitudes towards mobile applications, by next most popular attitudes towards mobile applications, March 2012
                                                                                                                • Figure 82: Attitudes towards mobile applications, by least most popular attitudes towards mobile applications, March 2012
                                                                                                                • Figure 83: Most popular attitudes towards mobile applications, by demographics, March 2012
                                                                                                                • Figure 84: Next most popular attitudes towards mobile applications, by demographics, March 2012

                                                                                                            Companies Covered

                                                                                                            • Accenture
                                                                                                            • Amazon.co.uk
                                                                                                            • Apple, Inc
                                                                                                            • Google, Inc.
                                                                                                            • Microsoft Corporation
                                                                                                            • Microsoft Ltd (UK)
                                                                                                            • Motorola Mobility Holdings
                                                                                                            • Nokia Corporation
                                                                                                            • Research in Motion Uk Ltd.

                                                                                                            Mobile Phone Apps - UK - June 2012

                                                                                                            US $2,583.33 (Excl.Tax)