Screen digest Ronan de Renesse

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  • 1. Mobile MediaMaking the app market payRonan de RenesseSenior Analyst, IHS Screen Digest AnalystJune, 2011
  • 2. Application store/smartphone combinationrevolutionised mobile media• Smartphones offer better tech for rich media co su pt o o mobile ( ed a consumption on ob e (WiFi, , memory, processing, power, screen size)• Applications stores have broken operators’ walled-gardens and fuelled innovation• Improved browsing experience has brought online and mobile together Android Market• Remaining issues: • Addressable market still small • Monetisation can be difficult • Over crowded market place • Device fragmentationCopyright © 2011 IHS Inc. All Rights Reserved. 2
  • 3. UK leads European smartphone market EU5: Smartphone installed base (m) iOS installed base by country (m)180 20 18160 16140 14120 12 10100 8 80 6 60 4 40 2 0 20 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 France Germany Italy Spain UK 2011 2014Copyright © 2011 IHS Inc. All Rights Reserved. 3
  • 4. Smartphone market was a three-horse race Europe: 2010 smartphone installed Europe: 2015 smartphone installed base market share by OS (%) base market share by OS (%) 3.7% 5.1% 4.0% 7.9% 22.9% 0.3% 6.0% 32.7% 38.3% 20.2% 47.9% 11.0% iPhone Android BlackBerry iPhone Android BlackBerry Symbian Windows Others Symbian Windows OthersCopyright © 2011 IHS Inc. All Rights Reserved. 4
  • 5. Apple dominates 2010 app revenues 2010: leading application stores share • Apple’s App Store took 82.5% of pp pp of revenues (%) - total €1 6bn €1.6bn revenues from the four leading stores 7.6% in 2010 with revenues of €1.3bn. 4.9% Apple will maintain its lead with 5.0% 5 0% around 60% market share among g leading stores to 2014. • In January 2011, Apple passed 10bn total downloads. By May 2011 downloads 2011, Google had served 4.5bn – with Nokia and RIM some distance 82.5% behind. Apple: App Store • Despite growth in downloads, Google Google: Android Market has so far struggled to monetise Nokia: Ovi Store many Android Market users. But y RIM: BlackBerry App World improvements are on the way.Copyright © 2011 IHS Inc. All Rights Reserved. 5
  • 6. …but Android Market will catch-up fairlyqquickly y Application stores revenue forecast (€bn)7654 Blackberry App World Nokia Ovi Store3 Google Android Market Apple App Store210 2008 2009 2010 2011 2012 2013 2014Copyright © 2011 IHS Inc. All Rights Reserved. 6
  • 7. What about others?Copyright © 2011 IHS Inc. All Rights Reserved. 7
  • 8. Games is the leading app category World App Store downloads (bn) Q1 2011: major publishers’ iOS 10 releases 9 EA Mobile 8 Capcom 7 Glu Mobile 6 Gameloft 5 Digital Chocolate 4 Namco 3 Hands-On Mobile 2 Disney Mobile 1 0 THQ Wireless 2008 2009 2010 2011 2012 2013 2014 0 2 4 6 8 10 Games OthersCopyright © 2011 IHS Inc. All Rights Reserved.
  • 9. The application market goes beyonddistributing repurposed content to mobile g p p Number of apps by TV network• For TV companies, mobile applications offer the (total = 78) opportunity to: t it t • increase the length of the relationship with MTV NBC consumers by making content accessible anywhere at anytime • create a more intimate contact with the audience with Fox Disney interactive features evolving around key TV CBS programmes • improve brand image by creating ‘cool’ apps p g y g pp Number of apps by g pp y genre Sports • increase viewership and address an audience Travel unreachable on any other platforms • generate additional revenues through paid News Games downloads/subscriptions and/or advertising• Popular applications tend to be more innovative Lifestyle by taking advantage of the mobile experience to Entertainment bring another dimension to existing services. Finance OthersCopyright © 2011 IHS Inc. All Rights Reserved. 9
  • 10. Online freemium music providers seemobile as a way to improve their businesscase• Spotify, Deezer both launched mobile applications on Android and iPhone/iPod Touch in 2009• Spotify: 1m paying subs from 6.7m active users in a region g resistant to paying for music i t tt i f i• Deezer: 800,000 paying subscribers• Mobile operators embrace the unlimited music on-demand craze • 3UK bundled a Spotify premium subscription with its latest Android handset • Orange made a strategic investment in Deezer in 2010 and also bundles it with some of its servicesCopyright © 2011 IHS Inc. All Rights Reserved. 10
  • 11. But, rich media is still only a small subset ofmobile content and data revenues Rich media as % of data & content revenues 14% 12% 10% 8% 6% 4% 2% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 Music Games TV & Video Application storesCopyright © 2011 IHS Inc. All Rights Reserved. 11
  • 12. Mobile won’t offset decline in traditionalmedia revenue streams unless bundled Top-tier customer Piracy migration Over-the-top Increased ARPU Core Core media Increased media Core Customer ownership services p competition services media Blended ARPU ARPU services ARPU Reduced churn Tougher ARPU regulation Added value Mobile ARPU Differentiation Mobile ARPU Mobile ARPUCopyright © 2011 IHS Inc. All Rights Reserved. 12
  • 13. The mobile data crunch. Who will pay fordata?• Smartphones, mobile broadband and UK mobile data market M2M are set to drive exponential 900 14 mobile data traffic growth 800 12• Increasing competition and heavy 700 subsidies on data/smartphone 10 bundles will endanger mobile data Revenu per GB (£) 600 monetisation affic (PB) 500 8 ue• There are three options for operators: 400 Tra 6 • Add extra capacity on the network and increase prices 300 4 • Content delivery optimisation (IMB, 200 throttling, QoS, WiFi) • Ch Charge content providers ( bil d id (mobile data 100 2 termination fees) 0 0 2010 2011 2012 2013 2014• Video is set to contribute to more than half of mobile data traffic by Smart phones Mobile Broadband Revenue per GB 2015Copyright © 2011 IHS Inc. All Rights Reserved. 13
  • 14. Tablets: similar apps but better monetisation- US case studyy US: top grossing iPad apps US: average price per paid game ($) 1% 1% 2% 1% 2% 1% 0.3% 3% 4 4% 4% 4% 0.3% 3% 3.5 3% 4% 3 1% 1% 2% 2.5 63% 2 1.5 Books Business Education Entertainment Games Healthcare & Fitness 1 Lifestyle Medical Music Navigation News Photography 0.5 Productivity Reference Social Networking Sports S t Travel T l Utilities Utiliti 0 Weather iPhone iPadCopyright © 2011 IHS Inc. All Rights Reserved. 14
  • 15. Thanksronan.derenesse@ihs.comTel: 44T l +44 207 424 2865Twitter: @Ronan_SD