Tablet owners spend significantly more on smartphone apps than those who do not own a tablet, according to the latest results from Analysys Mason's European and US Connected Consumer Survey. The share of smartphone owners who spend more than EUR5 a month on apps is nearly three times higher for tablet owners. App spend is driven by a minority of users, which therefore generates intense competition among app publishers and little revenue for operators providing billing capabilities on app stores. The ability to isolate, understand and then encourage users to spend more on apps is critical for a long-term sustainable app strategy. Multi-device ownership is also known to drive mobile data spend. Operators can bundle app vouchers with multi-device tariffs to differentiate from the competition and drive multi-device connectivity onto their network.
iPhone owners are twice as likely as other smartphone owners to buy an app
The latest results from Analysys Mason's Connected Consumer Survey 2013 series, published in the new report, The Connected Consumer Survey 2013: mobile content and applications, reveal that 53% of smartphone respondents had never bought a mobile app when our survey was conducted in October 2012. This annual survey covers the telecoms and media usage and preferences of 6600 consumers in France, Germany, Poland, Spain, the UK and the USA.
Smartphone app spend is hindered by:
- the increasing availability of free apps
- the unwillingness for smartphone users to register their credit-card details with app store owners
- the inability to transfer paid-for applications from one smartphone platform to another.
The share of smartphone respondents buying apps and the level of spending allocated to apps vary significantly by device model. For example, only 30% of iOS owners in our panel of respondents had never bought an app compared with 58% to 66% of respondents with smartphones that use other operating systems. Interestingly, the survey results showed a correlation between spend on apps and the length of ownership of a smartphone. The share of app shoppers (people who had installed and paid for at least one app on their current smartphone) who spend more than EUR2 per month on apps is 10 percentage points higher (60%) for those who have owned their device for less than 6 months compared with those who have owned their devices for longer (50%).
App spend is partly driven by the type of device that smartphone users own. Owners of newer and more-advanced devices are more likely to buy apps.
Tablets create additional value for the smartphone app market, which can benefit developers and operators
People who own a tablet typically have more disposable income than those who do not own such a device, and are more likely to own high-end smartphones on which app spend is higher and more prevalent.
- More than 60% of tablets owners who have installed apps on their smartphones have paid for an app compared with 40% of non-tablet owners.
- In addition, the share of smartphone owners who spend more than EUR5 per month on apps is nearly three times higher for those who also own tablets compared with those who do not.
However, the gap in smartphone app spend between tablet owners and others is set to decrease as tablets become more mainstream.
New connected device segments such as tablets are driving demand for apps and connectivity. It is important that operators and vendors capture and monetise this demand. The synchronisation of the users' app library between smartphone and tablets will make mobile device ecosystems more appealing. Operators can also adapt and improve their approach to consumers' multi-device usage – they could bundle app vouchers with multi-device tariffs to differentiate and drive multi-device connectivity onto their network.
Figure 1: Monthly smartphone app spend by type of device ownership [Source: Analysys Mason, 2013]1,2
1 Question: "On average, how much do you spend on apps per month for your smartphone?", "What is the mobile phone model?", "You stated earlier that you own or have access to a tablet. What is the brand of the tablet?"; n = 1976 for non-tablet owners, n = 1010 for tablet owners, n = 284 for iPhone and iPad owners.
2 Respondents reported app spend in their local currency. The categorisation does not take into account the currency variations between USD, GBP and EUR. Responses from respondents in Poland have been converted into EUR.