Mobile content servicesmarket in Finland 2011-2015June 2012
Preface                         3    Mobile applications 15               Mobile marketing        33                      ...
This report looks at mobile content services             The report is a multi-client study commissioned by       The repo...
IntroductionMobile services have been topical since the late1990’s. During the first ten years mobile commercewas dominated...
DefinitionsMobile content market value represents the end-         Smartphone is a mobile phone built on a mobileuser spend...
1%        2%                                                                                                    261       ...
Against the general expectations, the market value                       iPad, Google Play, Nokia Store and Windows Phone ...
KEY TRENDSANDHEADLINES    Key phenomena and future opportunities in mobile space   9IN MOBILE    Premium rate calls and SM...
Key phenomena and future opportunities in mobile spaceThe key developments, opportunities     The mobile services market h...
Figure 4 | Key phenomena and drivers in mobile spaceSource: Idean, 2012                                                   ...
Premium rate calls and SMS bring the bulk of revenue– applications and banners drive the growthPremium rate calls and SMS ...
Mobile browsing booming                                                                                                   ...
Rapidly changing device baseSmartphones and tablet devices are currently                    Smartphone penetration Q1 2012...
Rapidly changing device base          Symbian            Android            iOS           RIM                     Windows ...
MOBILE         Mobile applications market in Finland                  16APPLICATIONS               Top applications in Fin...
Mobile applications market in FinlandThe combined mobile applications market value in Finland was fourmillion euros in 201...
Top applications in FinlandApplication stores publish top charts by countries       There are all together 25 Finnish paid...
Top applications in Finland, paid App Store, iPhone                   App Store, iPad             Google Play      Windows...
Top applications in Finland, free App Store, iPhone               App Store, iPad                 Google Play      Windows...
Top applications in Finland, paid                          App Store – iPhone                        App Store – iPad     ...
Top applications in Finland, free                          App Store – iPhone                        App Store – iPad     ...
Application store revenueTotal consumer spending in application stores in Finland2011 was approximately four million euros...
Application store revenueApple’s App Store is the largest application storethroughout the viewed period in Finland, when  ...
Examples of application downloadsThere is no public statistics regarding   Idean has estimated average download figures for...
Examples of application downloadsFigure 15 | Examples of published application download figuresSources: Service providers, ...
Examples of application downloadsIn July 2011 Eat.fi, an online restaurant guide,informed that its iPhone application had b...
Average number of applications in different countries                                                            Free apps ...
PREMIUMSMS SERVICES&PREMIUM       Premium SMS services   29RATE CALLS     Premium rate calls     31                       ...
Premium SMS servicesAgainst the general expectations, the market                   Market value (M€)                      ...
Premium SMS servicesThe revenue for most of the major SMS service                    Directory services                   ...
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
Mobile content services market in Finland 2011 - 2015
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Mobile content services market in Finland 2011 - 2015

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Report looks at the topical mobile trends and provides various forecasts on content market development in Finland. For example, it examines the revenues in mobile application market and evaluates the device base developments in Finland for the years 2011-2015.
“Fast growing application stores provide still minor income compared to SMS content and premium rate call revenue in Finland.” reveales Kalle Snellman, the report’s author and Senior Strategist at Idean.

Idean is a unique user centric design company. We provide customer-driven user interface design, holistic research, market analysis and innovation services.

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Mobile content services market in Finland 2011 - 2015

  1. 1. Mobile content servicesmarket in Finland 2011-2015June 2012
  2. 2. Preface 3 Mobile applications 15 Mobile marketing 33 market in FinlandIntroduction 4 Top applications in Finland 17 Mobile device base 36Definitions 5 Application market revenue 22 Examples of application 24 Mobile payment 41Summary 6 downloads method benchmark Average application usage in 27 different countries Mobile payment method 42Key trends and 8 benchmarkheadlines in mobile Premium SMS 28 Survey on IP billing 44context services services and premium rate call Interviews and 45Key phenomena and futureopportunities in mobile space 9 services sourcesPremium rate calls and SMS 11bring the bulk of revenue – Premium SMS services 29applications and bannersdrive the growth Premium rate call service 31Mobile browsing booming 12Rapidly changing device base 13 2
  3. 3. This report looks at mobile content services The report is a multi-client study commissioned by The report is carried out as a combination of desktopmarket in Finland with a broad scope. The market the Ministry of Transport and Communications in and interview study in May - June 2012. The report’ssize and market drivers for mobile content services, Finland, Ministry of Employment and the Economy findings are based on in-depth interviews withmobile marketing and mobile device base are studied and Teleforum ry. players in the mobile content market and otherin the report. Market size for mobile content services market experts as well as Idean’s database on mobileis presented mainly for the years 2010-2015, some The purpose of the report is to provide an overall content services. Additionally, research regardingstatistics may cover also earlier years. The market view on the mobile content market dynamics in premium content services provided by TNS Gallupdata for the years 2008-2011 are actual figures Finland. The report aims to help players in the has served as a basis for the analysis. All this databased on data gathered for this and earlier reports. mobile content market to develop current and new has been complemented with publicly availableYears 2012-2015 are forecasts based on market services based on solid understanding on the market. sources. Kalle Snellman, Senior Strategist at Ideananalysis and up-to-date information available on The report’s focus is in the mobile commerce, i. e. is the author of the report. Idean’s Project Assistantthe market. All the market figures and other content services that are targeted to bring direct or indirect Lauri Lankinen and Senior Visual designer LeoPrefacein this report are based on analysis made by Idean revenue. However, it also helps players that plan to Hakola have created the visual and page layout.Enterprises consultants and represent their views provide non-commercial services.and opinions. The author would like to thank all interviewees for devoting their time and effort in contribution to this report. 3
  4. 4. IntroductionMobile services have been topical since the late1990’s. During the first ten years mobile commercewas dominated by a handful of players specializedin mobile content. The situation has now changed asan increasing share of the total online consumptionis moving into mobile devices. This trend affectspractically all organizations from different industries.Many of the companies and authorities that haveignored or taken only minimal steps in the first phaseof the mobile services, have now implemented mobileservices or have serious plans for implementations. Asa matter of fact, all organizations have become more orless technology oriented and dependant. Idean believesthat the next technological focus area is mobile.The current media coverage on mobile issues drawsa picture of mobile application dominated mobilecommerce. This is not a full picture, though. Themobile applications represent only a small shareof the total mobile originated content revenue. Themajority of the revenue is still delivered by premiumrate calls and SMS based services. On the otherhand, only a part of the mobile services are expectedto bring direct revenues.This report looks at the mobile content servicesin Finland, and in particular how the services aremonetized, since the monetization is where manyof the companies are struggling. It is important tohave relevant, up-to-date and consistent informationregarding the mobile market in order to make solidand well-reasoned business plans and decisions. 4
  5. 5. DefinitionsMobile content market value represents the end- Smartphone is a mobile phone built on a mobileuser spending on mobile services within the viewed computing platform with more advanced computingdistribution channels. Spending on SMS based abilities and connectivity than a feature phone has.content services, premium rate calls and application One of the most significant differences is that thestores are in the scope of the report. Media spending advanced application programming interfaces (APIs)on mobile marketing channels are also included in on smartphones for running third-party applicationsthe market value. can allow those applications to have better integration with the phone’s OS and hardware than typical feature phones. Currently the smartphonesMobile advertising market value. The market value include devices with the following operatingof mobile advertising consists of expenditure on systems: iOS, Android, Windows Phone, Symbian,mobile media. In other words, the money spent on BlackBerry OS and Meego.SMS traffic, search and banners in a mobile mediaspace. Mobile site design and other similar costsrelated to mobile marketing are excluded from the Feature phone is defined to cover all other mobilemarket value. phones than smartphones in this report.Mobile marketing market value is the combinedmarketer spending on mobile advertising andcustomer relationship communications. 5
  6. 6. 1% 2% 261 256 255 259 252 1% 247 233Summary 221 Market value (M€) -2% Growth (%)The mobile content service market in Finland rootsback to early 1990’s, when premium rate callsemerged. The first SMS based logos and ringtoneswere delivered over the mobile networks in thelatter part of 1990’s. Approximately ten years laterappeared application stores for smartphones. All -5% -5% Figure 1these markets co-exist today and in the near future. -6% Total mobile service revenue in Finland 2008-2016 (M€)The demand for premium rate calls and premium Source: Idean, 2012SMS services have saturated and the demand is 2008 2009 2010 2011 2012 2013 2014 2015gradually declining. At the same time the overall forecast forecast forecast forecastusage of mobile services is growing strongly. Mobileapplications and browsing are among the fastest premium rate calls and premium SMS are bringing overshadowed by the more hyped markets, suchgrowing mobile services. This doesn’t necessarily the majority of the revenue despite the shift in the as premium SMS and mobile application stores.transform to revenue since major share of the service providers’ focus on mobile applications Premium rate calls represented two thirds of theapplications and internet browsing is free of charge. and sites. In 2011 these two leading categories total mobile services revenue in 2011 and the totalMore specifically, an increasing share of services represented 94% of the total service revenue in revenue was approximately 170 million euros. Theapply business models that are not targeted to bring Finland. Their share is gradually decreasing, but they total revenue trend has been slowly decreasing, butdirect revenue. are forecast to still take about 80% of the total the fall is forecast to accelerate towards the end revenue in 2015. of the forecasted period of 2012-2015. DirectoryThe split between service categories reveals relative services were the leading service category andslowness in the transformation of the mobile content The market for premium rate calls has a long represented a good half of the total market revenueservices. The most traditional services among these, and successful history, which has been unfairly in 2011. 6
  7. 7. Against the general expectations, the market value iPad, Google Play, Nokia Store and Windows Phone revenue today, but display and search marketingfor premium SMS services has not dropped during 7 Marketplace. Apple’s App Store was the largest in are forecast to show strongest growth in the future.the last couple of years. In fact, it has remained revenue among the viewed ones, with approximately The total mobile marketing spending is forecast torather stable and even showed a mild growth. In 2011 57% share of the total revenue in 2011. Application reach 19 million euros in 2015. Customer relationshipthe total market value was 70 million euros, which is stores’ revenues are predominantly global, since only communications is the largest category amongone per cent up from the previous year. In the coming a minority of the top 100 application publishers are mobile marketing. Currently its share is over 60%years the SMS revenue is forecast to decline as Finnish. Games was the most popular application and in 2015 it is still forecast to represent over 40%some of the most lucrative SMS services migrate to category within all of the viewed application stores. of total mobile marketing spending.application and browser based services. Mobile marketing is growing steadily. In 2011 the Mobile device base has a strong influence in theThe combined mobile applications market value total marketing spending was 14 million euros, which mobile content service uptake and development.in Finland was four million euros in 2011, including is 10% more than in the previous year. SMS based Currently the most interesting and importantrevenue from Apple’s App Store for iPhone and forms of mobile marketing bring majority of the information is the installed base of smartphones, since many of the new services are targeted on this Mobile marketing segment. Also tablet devices are in the center of Application stores 5010 4836 attention. The total installed base of smartphones Premium SMS Premium rate calls 4402 4545 in Finland was approximately 2,6 million and 9 13 14 17 4083 represented 37% of the total mobile device base of 11 10 19 3556 seven million in 2011. Smartphones are forecast to 12 21 69 69 70 70 68 15 25 outnumber feature phones in the beginning of 2013. 62 20 3444 2917 The tablet device sales boomed in 2011 and the total 53 2598 46 2455 installed base was approximately 150 000 tablets in 2164 1991 Feature phones the end of 2011. The growth of smartphone and tablet Smartphones device base is expected to remain strong in the near Tablet devices 177 172 171 170 167 154 1298 future. 143 968 130 649 343 148 132008 2009 2010 2011 2012 2013 2014 2015 2010 2011 2012 2013 2014 2015 forecast forecast forecast forecast forecast forecast forecast forecastFigure 2 | Total mobile services revenue by category in Finland Figure 3 | Installed base of feature phones, smartphones and2008-2015 (M€) tablet devices in Finland 2010-2015 (thousands)Source: Idean, 2012 Source: Idean, 2012 7
  8. 8. KEY TRENDSANDHEADLINES Key phenomena and future opportunities in mobile space 9IN MOBILE Premium rate calls and SMS bring the bulk of revenue – apps and banners drive the growth 11CONTENT Mobile browsing booming 12SERVICES Rapidly changing device base 13 8
  9. 9. Key phenomena and future opportunities in mobile spaceThe key developments, opportunities The mobile services market has experienced major in the timeline where they are expected to haveand other current issues are developments and changes during the last couple significant impact.discussed in this chapter. The aim of years. New advanced services have emerged andis to give an insight on the topical the usage of services is strongly growing. There are Perhaps the most significant individual driver in theissues in the market and to provide even greater changes in sight if we look at the future figure is the Bio ID. Identification is a key componentthe reader an overall view on some of opportunities for mobile service development. in a large number of services. If a mobile device canthe broader issues. make a strong biometric authentication in a fast and In Idean’s opinion, mobile devices are becoming a easy way, then the need for passwords, pin-codes fundamental hub for various future services – even and user names gradually disappear. This would have more elementary than the current desktop devices. repercussions in various fields of mobile and online There are several reasons why mobile devices services. For example, mobile devices could replace are superior to desktop and laptop computing. the need for cash. Mobile devices are personal in their nature, always available and online and context aware (e.g. location There are serious early attempts to this direction. information). Mobile devices provide an ideal channel For example, iCache Inc., a US-based company for the future services, as the digital services are in has released an iPhone case and application that general moving into a more personalized and context enable biometric secured credit card payments. This aware mode. digital wallet can store all sorts of card information into iPhone and is accompanied with fingerprint Figure 4 on the next page combines and summarizes biometric security element. Idean’s view on the key phenomena and drivers in the future service design. Idean has identified four It wouldn’t be hard to imagine that the next major phenomena in sight that will impact the future generation smartphones would have an of mobile service design These phenomena include embedded bio ID, or perhaps a combination of two several technology related drivers which are placed complementary biometric security elements. 9
  10. 10. Figure 4 | Key phenomena and drivers in mobile spaceSource: Idean, 2012 New communication methods Public interactive Next gen screens mobile In- networks telligent spaces Presence Augmented Se- Remote reality mantic diagnostics search Sensors In- Gesture telligent control Cloud OS content HTML 5 libraries Mobile ID M2M Big Natural Next gen data language back-end processing systems Open data Shopping Cloud 2.0 Navigation Social storage Mash up Mobile Bio Media Payments ID Bar-code Data Mobile Targeted & sensor Visualization Cloud Analytics banking marketing readers 2.0 2016 2015 2014 2013 2012 2012 2013 2014 2015 2016Data driven service business Real-time, context aware and anticipatory Unlimited media content supply Mobile driven consumer businessData is becoming a key driver for service services Content business is moving towards services Mobile use will reach and pass desktop use ofdesign and functionality. The ability to gather The services will become richer and provide that provide unlimited content supply for services in the near future thanks to device andand manage large masses of data is becoming personalized targeted information and services the users. At the same time the services service development. New mobile services willa pivotal competitive advantage as services for various situations. Their potential is will become increasingly personalized and have an ability to replace many of the currentbecome increasingly personalized and context especially significant in mobile use cases, since targeted. The changing and unclear status everyday concepts, such as cash, credit card,aware. At the same time there is an increasing mobile devices are more personal and rich in of content rights is slowing down the keys, and many others.amount of data available, both in-house and their capabilities. This phenomenon is strongly development though.open data. In the future the data will open ever- linked to the data driven service businessincreasing opportunities for new services. phenomenon. 10
  11. 11. Premium rate calls and SMS bring the bulk of revenue– applications and banners drive the growthPremium rate calls and SMS based services are still representingthe bulk of the mobile commerce despite the trending applicationstores and mobile banners. In 2011 the application stores and mobilebanners together represented approximately two per cent of the Premium rate calls Premium SMS & SMS marketing Application stores, mobile banners & searchtotal mobile content market value. By the end of 2016 their projectedshare is expected to rise up to 16 per cent of the total market. 100% 7 15 19 25 33 90%The market is divided into three sections in figure 5. The premium 80 81rate calls category represents the end-user spending on premium 83 84 80% 82 76voice services. SMS based services include the combined end- 67 59user and mobile ad spending on SMS based content services and 70%marketing together. Application stores and mobile banners include 60%the end-user and mobile ad spending on SMS based content servicesand marketing together. 50%In the big picture, the market for premium rate calls and SMS based 40%services is gradually decreasing and the one for mobile applications 177 172 171 170 167 154 143 30% 130and banner advertising keeps growing. However, there are severalexceptions for this rule. Some SMS based service areas are still 20%showing good growth. 10%In practical terms, SMS based services and premium rate calls are 0%invoiced in the mobile phone subscription bill. These services are 2008 2009 2010 2011 2012 2013 2014 2015 forecast forecast forecast forecastmore populated by Finnish market players, whereas the nature ofapplication store business is global. Consequently, the balance of Figure 5 | Mobile services market by distribution method in Finland 2008-2016 (M€)domestic and global players seems to be turning into the global one’s Source: Idean, 2012advantage as the commerce moves into new channels. Note! The numbers in the figure represent combined revenue and advertising spending by distribution technology. 11
  12. 12. Mobile browsing booming 566 606 that mobile will pass desktop browsing within aIlta-Sanomat Mobiili couple of years. Currently, in May 2012, it seems likeHelsingin Sanomat Mobiili 473 448 the growth in the top desktop news sites has stalled. This may be caused by general market saturationIltalehti Mobiili as a majority of Finns are browsing news sitesMTV3 Mobiili 385 706 regularly. Another explanation may be mobile sites’Kaleva Mobiili cannibalising effect on the corresponding desktop sites. Some of the former desktop site visitors areAamulehti Mobiili using mobile sites instead of desktop. 184 000 250 599 The user count development is strongly dividing players. Few top sites are taking a major share of 142 000 the total traffic, whereas the rest will have to settle for rather humble visitor numbers. The same trend74 000 is evident in the desktop sites. In practice, the66 000 18 817 consequence is that only some top sites will collect 6 700 16 312 a vast majority of the advertising revenue and have2010 2011 2012 a better chance to become financially viable with the current business models.Figure 6 | Weekly visitors for selected mobile sites. (different browsers during 20/2010 - 23/2012) Source: TNS-Metrix, Idean, 2012 On the other hand, there is a clear monetization gapMobile browsing has boomed in the past couple of fivefold on average. This illustrates the impact of looming in mobile advertising space if the currentyears and continues growing. In May 2012, the leading the changing device base and improved browsing online advertising migrates into mobile. The mobilemobile sites attracted approximately half million capabilities. Smartphones and tablets are creating a devices and their smaller screens provide lessdifferent browser visits per week. These numbers momentum for the mobile browser based services. advertising space and thus bring less advertisinginclude both mobile site and mobile application revenue per user. This is especially relevant for thevisitors. During the past two years the number of The growth rates in mobile sites are outpacing the current type of banner advertising formats. Newdifferent browser visits have increased roughly corresponding desktop sites and one can foresee advertising formats may change the pattern though. 12
  13. 13. Rapidly changing device baseSmartphones and tablet devices are currently Smartphone penetration Q1 2012 Smartphone penetration Q1 2011making their way to masses. Over one third of theFinnish mobile phone base consisted of smartphones 28% 36% 38%in the end of 2011 and over a half of the mobilephones sold here in 2011 were smartphones. Lately, 29% 29%the leading mobile phone operators have indicated 24% 21% 27% 18%that smartphones represent over two thirds of theirtotal mobile phone sales. Italy Germany Austria FranceFinland has a reputation of having advanced mobileuser and device base. This image is about to crumble. 43% 44% 44% 38%Despite the ongoing fast uptake of smartphonesin Finland it seems that many other countries haveoutpaced Finland in this respect. A recent study 29% 33% 33% 31%provided by Google indicates that Finland is laggingbehind in smartphone penetration compared to Finland Netherlands Spain USmany other Western European countries in Q1 2012.Finland was the least smartphone penetrated Nordiccountry among the benchmarked in 2012 54% 45% 51% 51%The smartphone penetration grew rapidly in all of thestudied countries between 2011 and 2012. According 30% 30% 30% 33%to the same source, the differences between thecountries in Q1 2011 were rather marginal. Thesmartphone penetrations were around 30% in Denmark UK Sweden Norwayall of the benchmarked countries except for Italy,Germany and Austria in 2011. The change withinthe next 12 months suggests that the some of the Figure 7 | Smartphone penetration in selected countriescountries have had tremendously strong smartphone Source: Interview study commissioned and published by Google in Q1 2012, based on 1000 interviews in each country.sales and migration in 2011. Data visualization by Idean. 13
  14. 14. Rapidly changing device base Symbian Android iOS RIM Windows Other There are also other differences in the structure of the smartphone base. Nokia, and in particular Finland UK France Germany Symbian has a strong market share in Finland. In the other benchmarked countries, the smartphone base 13 % is less populated by Symbian and higher numbered 17 % 30 % 30 % by Android, iOS and RIM, as illustrated in the figure 8. Idean estimates that Finland is an exception within 21 % Western European countries with it’s high share of 46 % 91 % 27 % 19 % 30 % 19 % Symbian devices. 12 %2010 Finland UK France Germany 11 % 9% Figure 8 | Installed base of smartphones by OS in selected 15 % 17 % 18 % 28 % countries in 2010 and 2011. 9% 18 % Source: Finland’s statistics by Idean, 2012; 22 % other countries by ComScore, 2012. 26 % 37 % 25 % 35 % 69 % 34 %2011 14
  15. 15. MOBILE Mobile applications market in Finland 16APPLICATIONS Top applications in Finland 17 Application store revenue 22MARKET IN Examples of application downloads 24FINLAND Average number of applications in different countries 27 15
  16. 16. Mobile applications market in FinlandThe combined mobile applications market value in Finland was fourmillion euros in 2011, including revenue from Apple’s App Store foriPhone and iPad, Google Play, Nokia Store and Windows Phone 7Marketplace. Apple’s App Store was the largest in revenue among theviewed ones, with approximately 57% share of the total revenue in2011. Application stores’ revenues are predominantly global, since onlya minority of the top 100 application publishers are Finnish. Gameswas the most popular application category within all of the viewedapplication stores.Downloadable mobile applications, which are often called mobile apps, havebecome popular among mobile users and mobile content providers. One couldsay that mobile applications and advanced smartphones have finally redeemedthe expectations made for mobile services in the turn of the century.Mobile applications have enabled a new level of user experience in mobiledevices. The start of the mobile application business was set when Applelaunched its store in the summer 2008, followed by Android Market couple ofmonths later. In March 2012 Android Market was rebranded as Google Play.Apple’s App Store launch took place in approximately a year after the originallaunch of the iPhone. App Store and Google Play are the two leading applicationstores globally. Other significant application stores are Nokia Store, WindowsMarketplace, Amazon Appstore and BlackBerry App World. In Finland the mostnotable application stores are Apple App Store, Google Play, Nokia Store andWindows Marketplace. 16
  17. 17. Top applications in FinlandApplication stores publish top charts by countries There are all together 25 Finnish paid applicationsand the lists are further divided into different among the top 100 applications in the fourapplication category based listings. In this report application stores. Ten of these paid applicationsIdean has looked at the overall categories that are different versions of Angry Birds, which leavescover all application categories together. The 15 paid applications for the rest of the Finnishoverall category is further divided into paid and free publishers. On the other hand, all top hundred listscategories, which are both looked separately. The are dominated by games, where Finns have onlylists in this report represent only one day, but they some representation beyond Rovio.still give a good overview of the typical situation inthe application stores. In the figures 11 and 12, Idean has analysed the top 100 lists by application categories. All of theThe distribution of applications by the nationality of categories in different platforms are covered.publisher reveals the global nature of the application However, games category has several subcategories,store channel. Only a minor share of the applications but is viewed as one. Some of the categories aredownloaded in Finland are published by Finnish platform defined, such as “App Wallpaper”, which is acompanies or organizations. Without Rovio and Google Play specific category. Otherwise, the similarAngry Birds, the share of Finnish publishers would categories have been combined in the correspondingbe even thinner, especially in the top 10 charts. Best rows to allow benchmarking across platforms.representation of Finnish publishers is in WindowsMarketplace free category, where almost a one Games are the leading mobile application categorythird of the top 100 applications were by Finnish in all of the reviewed platforms. They represent frompublishers. 41 to 71 per cent of the paid applications and 34 to 46 per cent of the free applications in the top 100In general, Finnish publishers are best represented across all platforms. Other popular categories arein the free categories. Close to one quarter of the entertainment, music, photography, productivity,combined free application are published by Finns. tools, utilities, news and social networking. 17
  18. 18. Top applications in Finland, paid App Store, iPhone App Store, iPad Google Play Windows Marketplace 3rd May 2012 10th May 2012 10th May 2012 4th June 2012 1 5 1 3 1 Finnish publishers have been identified from the top 100 charts 10 9 in order to understand the effect and scale on the Finnish mobile 11 13 15 11 14 business. Interestingly, there are many applications in Finnish language, which are not published by Finnish players and are thus excluded from the Finnish application publisher lists. 21 27 28 33 34 35 iPhone Google Play 1 Angry Birds Space 1 Angry Birds Space Premium 5 Angry Birds 11 Angry Birds Rio 13 Angry Birds Seasons 15 ReittiGPS Windows Marketplace 27 ForecaWeather 1 Angry Birds 33 Bike Baron 9 Vitsikirja 34 Oma Kääntäjä 66 Sää Kaveri 35 Älypää 37 Max Payne Mobile 68 Junat 2 80 Monster Trucks Nitro 68 66 82 Monster Trucks Nitro 2 96 Lolan matikkajuna 80 79 iPad 82 1 Angry Birds Space HD 10 Angry Birds Seasons HD 11 Angry Birds Rio HD 14 Angry Birds HD 92 21 Lolan matikkajuna 28 TVKaista for iPad 96 79 Muumi - Kuinkas sitten kävikään? 92 Reitit 13 Finnish apps 8 Finnish apps 1 Finnish app 3 Finnish appsFigure 9 | Finnish paid applications in Top 100 by platform.Source: iTunes, www.AppAnnie.com, www.windowsphone.com, Idean, 2012. 18
  19. 19. Top applications in Finland, free App Store, iPhone App Store, iPad Google Play Windows Marketplace iPhone Android 3 Hockey Night 2nd Screen 1 Elisa Kotikisat 13 Reissuvihko GO 4 Angry Birds Space 18 Elisa Kotikisat 18 Veikkaus 19 Sports Tracker 19 Angry Birds 23 Seiska 29 Angry Birds Seasons 28 Fonecta Caller 30 Sports Tracker 32 Autorekisteri.fi 35 Angry Birds Rio 33 Junat kartalla 37 Fonecta Caller 39 YLE Areena 38 ForecaWeather 48 Angry Birds Free 41 Sanakirja.org 59 OP-mobiili 42 YLE Areena 65 Sampo Pankin Mobiilipankki 71 Ruutu 66 HS.fi - Helsingin Sanomat 74 OP-mobiili 67 Nordea Finland 78 Iltalehti - Päivän lehti 68 booxTV 88 Sonera Navigaattori 71 Navigaattori 99 Elisa Viihde 76 Ilta-Sanomat 77 Angry Birds Seasons Free Windows 81 Macmaa 3 Fonecta Caller 84 Minun Sonera 4 Ilta-Sanomat 87 Elisa Viihde 9 MTV3 Juuri nyt 89 Nettimoto 15 Kotikokki.net 94 ReittiGPS Lite 18 Premium Pool 97 tori.fi 19 Veikkaus 98 Eat.fi - Ravintolahaku 23 NRJ Finland 25 Yleisradio 27 Elisa Viihde iPad 29 Weather 9 Helsingin Sanomat 30 Telkussa nyt 16 Iltasanomat for iPad 31 Teksti-TV 17 IS TV 34 Polttoaine 22 Angry Birds HD Free 39 Mobiilikortti 25 Angry Birds Rio HD Free 40 Ampparit.com Reader 27 booxTV HD 42 Junat kartalla 33 Teknari 45 Elisa Kotikisat 35 MTV3 Juuri nyt HD 47 Kelikamerat 37 Kauppalehti 52 Suomi Teksti-TV 41 Elisa Viihde for iPad 54 ajanotto 42 Angry Birds Seasons HD Free 56 Mobiilipankki 43 Sampo Pankin Tabletpankki 58 Junahaku 49 Elisa Kirja 69 Telkku 52 Ruutu 72 Hockey Night 2nd Screen 53 Iltalehti - Päivän lehti 78 TaksiFinland 67 Länsiväylä 81 Viiniopas 25 Finnish apps 20 Finnish apps 16 Finnish apps 29 Finnish apps 71 Kelikamerat 80 OP-Pohjola 84 Televisiossa nyt 90 Sports Tracker 88 Telkussa 96 Minun SoneraFigure 10 | Finnish free applications in Top 100 by platform.Source: iTunes, www.AppAnnie.com, www.windowsphone.com, Idean, 2012. 19
  20. 20. Top applications in Finland, paid App Store – iPhone App Store – iPad Google Play Windows Marketplace 3rd May 2012 10th May 2012 10th May 2012 4th May 2012 Games 41 | 9 37 | 6 40 | 1 70 | 1 Entertainment 6 8|1 3 6|1 Tools 13 9 Music 9 2 7 4 Productivity 5 12 7 Photography 8 5 4 2 Social Networking 1 1 1 1 Utilities 2|1 9 News 1 2|1 Travel 1|1 1 1 2 Education 5 2 Lifestyle 1 2 1 1 Navigation 4|1 2|1 Personalization 8 Weather 1| 1 3 2 Business 1 3 4 Sports 1 Communication 2 Healthcare & Fitness 4 41 | 9 Books 1 Finance Media & Video 2 Reference 1 1 Catalogs 1 Newsstand Personal finance Shopping Transportation Foreign app Finnish appFigure 11 | Top 100 paid applications in Finland – distribution by category.Source: iTunes, www.AppAnnie.com, www.windowsphone.com, Idean, 2012. 20
  21. 21. Top applications in Finland, free App Store – iPhone App Store – iPad Google Play Windows Marketplace 3rd May 2012 10th May 2012 10th May 2012 4th May 2012 Games 32 | 2 34 | 3 40 |5 34 | 1 Entertainment 8|3 5|7 3|2 2|6 Tools 9|1 12 | 2 Music 7 2 5 6|2 Productivity 2 8 4 Photography 9 2 4 Social Networking 8 6 4 6 Utilities 6|3 6 News 3 6 1 3|6 Travel 1 3 2|1 1|5 Education 7 Lifestyle 3 2 1 1|2 Navigation 2 1 Personalization 3 Weather 2 1|1 Business 1 1 Sports 1|2 1 1|3 Communication 6 Healthcare & Fitness 1 1 1 Books 1 1|1 1 1 Finance 3 2 1 Media & Video 1|2 Reference 1 |1 1 Catalogs Newsstand 1 Personal finance 1 Shopping 1 Transportation 1 Foreign app Finnish appFigure 12 | Top 100 free applications in Finland – distribution by category.Source: iTunes, www.AppAnnie.com, www.windowsphone.com, Idean, 2012. 21
  22. 22. Application store revenueTotal consumer spending in application stores in Finland2011 was approximately four million euros, which represents 152%a 152% growth over the previous year. The growth was 144%due to increased smartphone user base as well as greater 20supply of applications. There is also a growing amount of Market value (M€)Finnish applications available, which has been followed by 15an increasing marketing activity related to them. Growth (%) 12In 2012 the market value is expected to grow to approximately 1010 million euros, which is more than a double compared to theprevious year. In the following years the growth rate is forecast tomild down despite the ongoing growth of smartphone base. Thefuture smartphone user base growth comes from less active mobile 4 34%service user segments as the most active early adopters have 24% 23% 2already smartphones. Moreover, many of the major content playersare expected to introduce services based on alternative billing 2010 2011 2012 2013 2014 2015mechanisms for application stores. For example browser-based forecast forecast forecast forecastservices, where service providers can choose between a largeselection of different billing methods. In 2015 the total application Figure 13 | Total application store revenue in Finland 2010-2015 (M€)store revenue is forecast to be approximately 20 million euros. Source: Idean, 2012. 22
  23. 23. Application store revenueApple’s App Store is the largest application storethroughout the viewed period in Finland, when Nokia Storeconsidering the combined iPhone and iPad revenue.In 2011 the Apple App Store represented 57% Windows Marketplaceof the total application store revenue. Windows Google Play 8Marketplace is forecast to show the fastest growth 1in the coming years and to become a challenger forApple’s ecosystem in Finland. Apple App Store – iPad 4 1Google’s application store has yet failed to generate Apple App Store – iPhone 1considerable revenue. The growth will be further 2 1hampered by the slowing user base growth. 2 1 4Moreover, major application publishers in Finland 1 4will increasingly turn their focus towards the growing 1 3Windows smartphone base and the lucrative Appleecosystem. 3 1 6 6 5 3Apple has paid out to its App Store developers 1 24 billiondollarsbetween the launch of App Store in July 2008 2010 2011 2012 forecast 2013 forecast 2014 forecast 2015 forecastand March 2012 Figure 14 | Application store revenue by platform in Finland 2010-2015 (M€) Source: Idean, 2012. 23
  24. 24. Examples of application downloadsThere is no public statistics regarding Idean has estimated average download figures for Juuri nyt” application had been downloaded 200 000application downloads except for the overall category by different platforms in the times since the initial release 12 months earlier. Thesome sporadic news releases by spring 2012. The estimates are based on publicly application has been released for various platforms,individual service providers. A available material as well as undisclosed material including iOS, Meego, Symbian and Windows. Detailscollection of download figures is provided by service providers for the analysis. The regarding the download split between platforms top ranked free application for iPhone, Android were not revealed.presented in the figure 15 based and Symbian generate between 1000 and 2000on the news releases. The figure downloads per day in Finland. Windows downloads Veikkaus released download figures in June 2012.visualizes the download numbers are somewhat lesser, but they are picking up as According to the news release, the Windows Phonein the given timeframe. All of the the device base picks up rapidly. iPad application application, which was launched in January 2012, hadreviewed applications were free downloads are approximately half of the leading gained close to 20 0000 users in about five months.of charge and thus indicate the smartphone platforms. Android application had attracted some 10 000download potential for free apps downloads since its launch in April 2012 and Symbianin Finland. Corresponding figures The number 10 ranked free applications generate application close to 2000 in a matter of couple offor paid applications would be approximately 300 iPhone, Android and Symbian days. Additionally Veikkaus informed in May 2012considerably lower. downloads. The number 50 application brings close that the combined number of application downloads to 100 downloads and the number 100 application was 70 000, including its applications for iPhone, approximately 15 downloads. The download figures Android and Nokia devices. This suggest that there for paid applications generate between 10-15% of were at least 40 000 downloads for iPhone by June the corresponding free downloads. 2012. The Veikkaus iPhone application was removed from App Store in April and is not included in the In June 2012 MTV Media informed that its “MTV3 graph above. 24
  25. 25. Examples of application downloadsFigure 15 | Examples of published application download figuresSources: Service providers, Idean, 2012 iPhone iPad Android Windows Symbian Initial release Downloads to dateMTV3 Juuri nyt 200 000Veikkaus 20 000 10 000 32 000 2000 40 000Eat.fi - 5000 47 500Ravintolahaku 2500Ruutu.fi 120 000 142 000 22 000 35 000Sampo Pankki 21 000 66 000 10 000Helsingin Sanomat 52 000 7 1 1 2010 2011 2012 25
  26. 26. Examples of application downloadsIn July 2011 Eat.fi, an online restaurant guide,informed that its iPhone application had beendownloaded 40 000 times and it has some 9000weekly users. The application has been released alsofor Symbian and Android devices, with 5000 and2500 downloads respectively up to July 2011.Nelonen Media shared download informationregarding Ruutu.fi application in March 2012. ItsiPhone and iPad versions had gathered togetherapproximately 120 000 downloads since theirrelease in June 2011. Additionally Android applicationhad been gained 22 000 downloads in the first 1,5months since its release.HS iPad application was downloaded 52 000 timesby the end of 2011 and has some 20 000 unique activeusers per month according to the company. The initiallaunch of the application was in December 2010.Sampo Pankki informed in March 2012 that a total of56 000 users have downloaded its mobile bankingapplication, with a split of 62% and 38% betweeniPhone and Android downloads. Additionally theiPad application had attracted 10 000 downloads inthree months after initial launch. Sampo has boostedits mobile services uptake with rather noticeablemarketing efforts. 26
  27. 27. Average number of applications in different countries Free apps installed on averageThe figure 16 illustrates the installed base of Paid apps installed on average Apps used in the last 30 days (within the total amount of apps)mobile applications and usage in smartphones inselected countries. The data is provided by Google Total 17 apps 23 apps 24 apps 25 apps 28 appsand it is based on smartphone user interviews indifferent countries. There were approximately 1000interviews carried out in each country. Smartphoneusers were asked how many applications they 6 9 9 9 10currently have in their mobile, how many of them arepaid and how many applications have they used in Finland UK Germany Netherlands Norwaythe past 30 days.Finns have the least number of installed application 28 apps 28 apps 29 apps 30 apps 30 appsand applications used among the benchmarkedcountries. On average, there were 17 applicationsinstalled per a smartphone in Finland, of which threewere paid applications. A total of six applications 11 13 10 10 12were used within the past 30 days. These numbersare rather modest compared to other Nordic US Denmark Ireland France Swedencountries. For example in Sweden, the corresponding Figure 16 | Installed base of mobile applications and applications usage on smartphones in selected countries Q1 2012figures were approximately double in each of the Source: Google, 2012. Data visualization by Idean.viewed metrics. and Symbian users are in average less active be the relatively small number of local applicationsThere might be several explanations for this. in application downloading. There are fewer and less active marketing efforts related to them inPerhaps the most significant explanation is the applications available for Symbian devices and the Finland. Moreover, the differences could have beendifference in smartphone base. Nokia and Symbian market place has not become as popular as the ones smaller if the focus of the study would had beenare still dominating the Finnish smartphone base for iPhones and Androids. Another reason might exclusively on iOS, Android and Windows devices. 27
  28. 28. PREMIUMSMS SERVICES&PREMIUM Premium SMS services 29RATE CALLS Premium rate calls 31 28
  29. 29. Premium SMS servicesAgainst the general expectations, the market Market value (M€) Growth (%)value for premium SMS services has notdropped during the last couple of years. In fact, 69 69 70 70 1% 68it has remained rather stabile and even showed 1% 62a mild growth. In 2011 the total market value 0%was 70 million euros, which is one per cent up 53from the previous year. In the coming years theSMS revenue is forecast to decline as some of -3% 46the most lucrative SMS service usage migrateto application and browser based services.There are sharp variances in business dynamics -9%between different premium SMS services. The marketincludes some service categories that continue togrow, although most of the categories are facingnegative demand expectations. All in all, there is -13%currently a lack of major new services that would -14%drive the market growth. Moreover, the major serviceproviders’ current development focus is on mobile 2008 2009 2010 2011 2012 2013 2014 2015applications and browser based services, not in SMS forecast forecast forecast forecastbased services. Thus there are no expectations fornotable new premium SMS services in sight. Figure 17 | Total premium SMS services revenue in Finland 2010-2015 (M€). Source: Idean, 2012. 29
  30. 30. Premium SMS servicesThe revenue for most of the major SMS service Directory services Public transport Classifiedscategories remained stabile in 2011 against 2010. In Vehicle registry inquiries Chat & communities Interactive TV servicesfact, the usage of many services was declining, butthe price increases compensated the drop in trans- Ringtones Weather Othersactions. Services that were growing and impactedthe total market revenue in 2011 include mobile quiz,social media, classifieds and charity. Services thathad a contrary effect and declined include ringtones,directory services, games and SMS loans. 17 17 16 18 15The overall demand continue to favor information 14services compared to entertainment services. Share 6 7 7of information services was approximately 70% of 7 7 11the total premium SMS revenue in 2011, up from 66% 3 5 7 3 3 4 5in 2010. 4 9 4 4 4 4 6 5 4 4 6The market for mobile content is dominated by a 4few large players and followed by dozens of other 3 4 8 7 5service providers. The operator’s role is mainly in thedelivery and billing services, less in service provision.Fonecta continued as the largest service providerby revenue in 2011, followed by HSL and MTV Media. 28 25 27 26Together these three players represented close 22 22 23 21to a half of the total market revenue. Major part ofthe remaining revenue is going trough aggregatorsthat host a number of services providers. Previouslymobile entertainment players, such as Zed, Aspiro 2008 2009 2010 2011 2012 2013 2014 2015and Jamba, were among the largest market play- forecast forecast forecast forecasters. Today their share has dropped significantly andsome of them have ceased to operate in Finland. Figure 18 | Premium SMS revenue by major service category in Finland 2008-2015 (M€). Source: Idean, 2012. 30

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