Mobile Applications & Apps Stores

Published by: Juniper Research Limited

Published: May. 1, 2009 - 109 Pages

Table of Contents

Glossary

Executive Summary

Introduction

What This Report Covers

The Market for Mobile Applications

How Content is Monetised

The Implications of the App Store Model

Strategic Recommendations

Storefront Managers

Operators

Vendors

Content Providers

Advertisers

1. The Rise of the App Store

1.1 Introduction

1.2 What is a Mobile Application?

Table 1.1: Examples of Mobile Applications by Entertainment Category

1.3 What This Report Covers

1.3.1Categories of Mobile Application

i. Games

ii. Finance & Productivity

iii. Multimedia & Entertainment

iv. Education & Reference

v. Lifestyle & Healthcare

vi. Social Networking

1.3.2 Mobile Widgets

1.4 The Development of Mobile Applications

1.4.1 OTA Downloads

1.4.2 The Rise of Enterprise

1.5 The First App Stores - Handango, Motricity and GetJar

1.5.1 Handango

1.5.2 Motricity/PocketGear

1.5.3 GetJar

1.6 The iPhone and the App Store

1.6.1 Apps Market pre iPhone

1.6.2 Launch of Apple’s iPhone

1.6.3 The Impact of ‘The App Store’

1.6.4 Industry Reaction to the iPhone/App Store

1.7 App Store Deployments Since Mid-2008

Table 1.1: App Store Launches, July 2008 onwards

1.8 Key Drivers of the App Store

1.9 Generic Drivers for App Stores

2. The App Store, the Mobile Value Chain and Revenue Distribution

2.1 Value Chain Analysis

2.1.1 Traditional Value Chains

Figure 2.1: Traditional Value Chain of Mobile Content

Figure 2.2: Mobile Content Value Web

2.1.2 App Store Value Chain

Figure 2.3 App Store Value Chain

i. Implications of This Model

2.2 App Store Business Models

2.2.1 Pay-Per Download

i. Case Study - Bolt Creative

2.2.2 Free to Download

2.2.3 Upselling Content

2.3 Opportunities and Benefits Across the Value Chain

2.3.1 Attractiveness for Operators

Figure 2.4: Operator Opportunities from Open Access Model. Western Europe Revenue Share 2008 & 2013

i. Case Study: JIL (Joint Innovation Lab)

2.3.2 Advantages to Vendors

2.3.3 Attraction for Content Providers

i. Case Study: Shazam

2.3.4 Challenges for White Label Storefront Providers

2.3.5 Advantages for Advertisers

Table 2.1: Key Drivers of Advertising in Mobile

i. Apps in Advertising - Case Study: Lynx

ii. App Store Advertising - Case Study: Carling

Figure 2.5: The Carling iPint

2.4 The Future of Legacy Distribution Channels

2.4.1 Operator Portals

2.4.2 Aggregators

2.4.3 Off Portal D2C

2.5 Market Hurdles and Constraints

2.5.1 Addressable Market

2.5.2 Access to the End-user

2.5.3 Visibility

2.5.4 Scale

2.5.5 Application Saturation?

2.5.6 Competitive Pricing

2.5.7 Cost of Data Services

2.5.8 The VoIP Issue

2.5.9 Macro Economic Issues

3. The Market for Mobile App Downloads

3.1 Introduction

3.2 Relative Popularity of Mobile Applications

Figure 3.1: Most Popular Categories of Applications on App Store (%) Split by Number of

Titles, March 2009

Figure 3.2: Top 100 App Store Paid-for Applications (%) Split by 6 Categories, March 2009

Figure 3.3: Top 100 App Store Free Applications (%) Split by 6 Categories, March 2009

Table 3.1: % of Handango Downloads Attributable to Games, by OS 2005-2008

3.3 Methodology

Figure 3.4: Bottom-Up Methodology for Derivation of Onstore/Offstore Mobile App Usage and Revenues

3.4 Global Mobile Subscriber Forecast

Figure 3.5: Global Mobile Subscriber Forecast (m) Split by 8 Key Regions 2008-2014

Table 3.2: Global Mobile Subscriber Forecast (m) Split by 8 Key Regions 2008-2014

3.5 Mobile Application Users and Usage

Table 3.3: % Mobile Users Who Download Apps Split by 6 Categories 2008-2014

Figure 3.6: Number of Mobile Users (m) Who Download Apps Split by 6 Categories 2008-2014

Table 3.4: Number of Mobile Users (m) Who Download Apps Split by 6 Categories 2008-2014

3.6 The Retail Market for Onstore Applications

3.6.1 Onstore Users and Usage

Table 3.5: % Application Downloaders (m) who Download via App Stores Split by 6

Categories 2008-2014

Figure 3.7: Number of Application Downloaders who Download via App Stores Split by 6 Categories 2008-2014

Table 3.6; Number of Application Downloaders (m) who Download via App Stores Split by 6 Categories 2008-2014

Figure 3.8: Average Number of Onstore App Downloads per User per Year Split by 6

Categories 2008-2014

Table 3.7: Average Number of Onstore App Downloads per User per Year Split by 6

Categories 2008-2014

Figure 3.9: Total Number of Onstore App Downloads Per Year (m) Split by 6 Categories 2008-2014

Table 3.8: Total Number of Onstore App Downloads Per Year (m) Split by 6 Categories 2008-2014

3.6.2 Retail Revenues of Onstore Applications

Table 3.9: % Onstore App Downloads Which are Paid For Split by 6 Categories 2008-2014

Figure 3.10: Number of Onstore App Downloads (m) Which are Paid for Split by 6 Categories

2008-2014

Table 3.10: Number of Onstore App Downloads (m) Which are Paid for Split by 6

Categories 2008-2014

Table 3.11: Price Per Onstore Mobile Apps Download ($) Split by 6 Categories 2008-2014

Figure 3.11: Onstore Mobile Apps, Retail Value ($m) Split by 6 Categories 2008-2014

Table 3.12: Onstore Mobile Apps, Retail Value ($m), Split by 6 Categories 2008-2014

3.7 The Retail Market for Offstore Applications

3.7.1 Offstore Users and Usage

Table 3.13: % Offstore Application Downloaders who Download, Split by 6 Categories 2008-2014

Figure 3.12: Number of Offstore Application Downloaders (m) who Download Split by 6 Categories 2008-2014

Table 3.14: Number of Offstore Application Downloaders (m) who Download Split by 6 Categories 2008-2014

Figure 3.13: Average Number of Offstore App Downloads per User per Year Split by 6 Categories 2008-2014

Table 3.15: Average Number of Offstore App Downloads per User per Year Split by 6 Categories 2008-2014

Figure 3.14: Total Number of Offstore App Downloads Per Year (bn) Split by 6 Categories 2008-2014

Table 3.16: Total Number of Offstore App Downloads Per Year (bn) Split by 6 Categories 2008-2014

3.7.2 Retail Revenues of Offstore Applications

Table 3.17: % Offstore App Downloads Which are Paid For Split by 6 Categories 2008-2014

Figure 3.15: Number of Offstore App Downloads (m) Which are Paid for Split by 6 Categories 2008-2014

Table 3.18: Number of Offstore App Downloads (m) Which are Paid for Split by 6 Categories 2008-2014

Table 3.19: Offstore Mobile Apps, Price per Download ($) Split by 6 Categories 2008-2014

Figure 3.16: Offstore Mobile Apps, Retail Value ($m) Split by 6 Categories 2008-2014

Table 3.20: Offstore Mobile Apps, Retail Value ($m) Split by 6 Categories 2008-2014

3.8 Total Retail Market for Mobile Applications

3.8.1 Application Usage Levels

Figure 3.17: Total App Downloads (m) Split by 6 Categories 2008-2014

Table 3.21: Total App Downloads (m) Split by 6 Categories 2008-2014

Figure 3.18: Total App Downloads (m) Split by Onstore/Offstore 2008-2014

Table 3.22: Total App Downloads (m) Split by Onstore/Offstore 2008-2014

3.8.2 Application Retail Revenues

Figure 3.19: Mobile Apps, Total Retail Value ($m) Split by 6 Categories 2008-2014

Table 3.23: Mobile Apps, Total Retail Revenues ($m) Split by 6 Categories 2008-2014

Figure 3.20: Mobile Apps, Total Retail Revenues ($m) Split by Onstore/Offstore 2008-2014 .. 80

Table 3.24: Mobile Apps, Total Retail Revenues ($m) Split by Onstore/Offstore 2008-2014

4. The Market for Mobile App Value-Added Content and Services

4.1 Methodology

Figure 4.1: Bottom Up Methodology for Derivation of Onstore/Offstore Incremental App

Revenues (Games, Lifestyle & Healthcare, Multimedia & Entertainment)

Figure 4.2: Top-Down Methodology for Derivation of Onstore/Offstore Incremental App

Revenues (Social Networking (SN), Finance & Productivity)

4.2 The VAS Market for Onstore Applications

4.2.1 Onstore Users and Usage (Games, Lifestyle & Healthcare and Multimedia & Entertainment)

Table 4.1: % of Downloaded Applications That Upsell VAS, Onstore Split by 3 Categories (Games, Lifestyle & Healthcare, Multimedia & Entertainment) 2008-2014

Figure 4.3: Number of Onstore Downloaded Apps That Upsell VAS, Upsold Content, Split by 3 Categories (Games, Lifestyle & Healthcare, Multimedia & Entertainment) 2008-2014

Table 4.2: Number of Onstore Downloaded Apps That Upsell VAS, Upsold Content Split by 3 Categories (Games, Lifestyle & Healthcare, Multimedia & Entertainment) 2008-2014 . 85

Figure 4.4: Average Number of Onstore VAS Sold Per Upselling Download Split by 3

Categories (Games, Lifestyle & Healthcare, Multimedia & Entertainment) 2008-2014

Table 4.3: Average Number of Onstore VAS Sold Per Upselling Download Split by 3

Categories (Games, Lifestyle & Healthcare, Multimedia & Entertainment) 2008-2014

Figure 4.5: Total Number of Onstore VAS Sold (m), Split by 3 Categories (Games, Lifestyle &

Healthcare, Multimedia & Entertainment) 2008-2014

Table 4.4: Total Number of Onstore VAS Sold (m) Split by 3 Categories (Games, Lifestyle & Healthcare, Multimedia & Entertainment) 2008-2014

4.2.2 Incremental Revenues of Onstore Applications

Table 4.5: Price Per Onstore VAS, Split by 3 Categories (Games, Lifestyle & Healthcare,

Multimedia & Entertainment) 2008-2014

Figure 4.6: Onstore Apps, Upselling Revenues ($m) Split by 5 Categories (Games, Lifestyle & Healthcare, Multimedia & Entertainment, Finance & Productivity, Social Networking) 2008-2014

Table 4.6: Onstore Apps, Upselling Revenues ($m) Split by Category (Games, Lifestyle &

Healthcare, Multimedia & Entertainment, Finance & Productivity, Social Networking) 2008- 2014

4.3 The VAS Market for Offstore Applications

4.3.1 Offstore Users and Usage (Games, Lifestyle & Healthcare and Multimedia &

Entertainment)

Table 4.7: % of Downloaded Applications That Upsell Offstore VAS Split by 3 Categories (Games, Lifestyle & Healthcare, Multimedia & Entertainment) 2008-2014

Figure 4.7: Number of Downloaded Apps That Upsell Offstore VAS, Upsold Content, Split by 3 Categories (Games, Lifestyle & Healthcare, Multimedia & Entertainment) 2008-2014

Table 4.8: Number of Offstore Downloaded Apps That Upsell VAS Split by 3 Categories (Games, Lifestyle & Healthcare, Multimedia & Entertainment) 2008-2014

Figure 4.8: Average Number of Offstore VAS Sold Per Upselling Download Split by 3 Categories (Games, Lifestyle & Healthcare, Multimedia & Entertainment) 2008-2014

Table 4.9: Average Number of Offstore VAS Sold Per Upselling Download Split by 3

Categories (Games, Lifestyle & Healthcare, Multimedia & Entertainment) 2008-2014

Figure 4.9: Total Number of Offstore VAS Sold (m) Split by 3 Categories (Games, Lifestyle &Healthcare, Multimedia & Entertainment) 2008-2014

Table 4.10: Total Number of Offstore VAS Sold (m) Split by 3 Categories (Games, Lifestyle & Healthcare, Multimedia & Entertainment) 2008-2014

4.3.2 Incremental Revenues of Offstore Applications

Table 4.11: Price Per Offstore VAS Split by 3 Categories (Games, Lifestyle & Healthcare,Multimedia & Entertainment) 2008-2014

Figure 4.10: Offstore Apps, Upselling Revenues Split by 5 Categories (Social Networking,Finance & Productivity, Multimedia & Entertainment, Lifestyle & Healthcare, Games) 2008-2014

Table 4.12: Offstore Apps, Upselling Revenues Split by 6 Categories (Social Networking,Finance & Productivity, Multimedia & Entertainment, Lifestyle & Healthcare, Games) 2008-2014

4.4 Total VAS Market for Mobile Applications

Figure 4.11: Mobile Apps, Total VAS Value ($m) Split by 5 Categories (Games, Lifestyle & Healthcare, Multimedia & Entertainment, Finance & Productivity, Social Networking) 2008- 2014

Table 4.13: Mobile Apps, Total VAS Revenues ($m) Split by Category (Games, Lifestyle & Healthcare, Multimedia & Entertainment, Finance & Productivity, Social Networking) 2008- 2014

Figure 4.12: Mobile Apps, Total VAS Revenues ($m) Split by Onstore/Offstore 2008-2014

Table 4.14: Mobile Apps, Total Retail Revenues ($m) Split by Onstore/Offstore 2008-2014

4.5 How Content is Monetised

4.5.1 The Implications of the App Store Model

Figure 4.13: Total Market for Mobile Apps, Retail and VAS Revenues ($m) Split by

Onstore/Offstore 2008-2014

Table 4.15: Total Market for Mobile Apps, Retail and VAS Revenues ($m) Split by

Onstore/Offstore 2008-2014

Figure 4.14: Total Market for Mobile Entertainment ($m) Median-Case Scenario Split by Onstore App Revenues vs Traditional Revenue Channels 2008-2013

Table 4.16: Total Market for Mobile Entertainment ($m) Median-Case Scenario Split by Onstore App Revenues vs Traditional Revenue Channels 2008-2013

5. App Stores: The Key Players

5.1 Storefront Brands

5.1.1 Google

5.1.2 Palm

5.1.3 Orange

5.1.4 Research in Motion

5.1.5 Nokia

5.1.6 Microsoft

5.1.7 O2 Litmus

5.1.9 Samsung

5.1.10 Cydia

5.2 White-label Storefronts

5.2.1 Amdocs

5.2.2 SurfKitchen

Abstract

This report provides a unique analysis of the opportunity for mobile applications and app stores forecasting market for six years, vitally breaking down by category of application (mobile game applications, lifestyle and healthcare apps, multimedia & entertainment apps, education & reference, finance & productivity and social networking) and by onstore & offstore.

App-billed value added services (subscriptions, premium events and additional content) is forecast revealing a market value well in excess of standalone app downloads and an investigation as to how apps are delivered both onstore and across traditional channels. The report also explains how developers, operators and OS providers have responded to the challenges laid down by the App Store including a discussion of how Apple differentiated itself from traditional models of content distribution, monetisation and revenue share.

Key Questions Addressed by this Report:

• How will the mass deployment of app stores impact both upon existing distribution content channels?
• How will the market for mobile applications develop over the next five years, and to what extent will growth be dependent upon onstore sales?
• What revenue streams will accrue from value-added services enabled by in-app billing?
• What opportunities do app stores offer for players across the mobile value chain?
• Which categories of mobile application will generate the largest revenues?
• How will app stores effect the distribution of entertainment and content revenues within the mobile ecosystem?
• Which players are poised to launch app stores in the short/medium term?

Key Benefits:

• A unique source of combined
research & analysis for the mobile applications marketplace including technologies, market characteristics and forecasts.
• Practical analysis of the emerging
opportunities for vendors and operators.
• Unique insight: interviews of leading
players with significant experience of the mobile applications market.
• Benefit from fresh thinking and
intelligent market assessment.

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