Disruptive Mobile Applications :: Portio Research :: published August 2011

18 August 2011

Mobile apps user base to grow at a CAGR of 42.8 percent 2010-2015 to reach 438.9 million

When you and I talk about 'disruptive social media' we would normally be talking about the affects of the medium on mobile network operator revenue flows, but for Christopher Schofield and Warren Calvert when they appeared in a UK court this week accused of plotting to cause a riot using facebook, it had a different meaning.

Thankfully for the normally quiet provincial town of Nelson, Lancashire, the two were ignored by their 'friends' - but none-the-less, it is another illustration of how new 'disruptive' mobile applications are affecting everyone in both their professional and personal lives.

Rather apptly, as Messers Schofield and Calvert were learning what Her Majesty's pleasure might be for them, John White at Portio sent me a note regarding disruptive applications and services, and how in the mobile ecosystem they are radically changing the traditional setup.

Be that change be in terms of wider reach, network asset usage, the creation of a new revenue stream, or the introduction of new stakeholders.

What John is referring to is those apps and services such as Mobile Video Streaming, Social Networking, Mobile VoIP, Bulk Messaging Services, and Mobile Payments, which are disrupting the mobile ecosystem in the ways mentioned.

While such apps and services do unquestionably present Mobile Network Operators (MNOs) with exciting opportunities, John reckons that they also - by their very nature - represent potent threats to incumbent businesses. And could ultimately threaten MNOs' key revenue generators: voice and SMS.

To make his point, John popped over to me a couple of relevant pages from Portio's latest report Disruptive Mobile Applications and Services 2011-2015, and he's allowed me to share them with you.

One of the key factors that John highlighted to me is the rising popularity of smartphones which have accounted for the massive popularity of mobile applications. In 2010, the smartphone market witnessed a staggering year-on-year growth of 74.2 percent to reach 298.7 million shipments. Smartphone shipments are expected to increase to 909.3 million shipments in 2015, growing at a CAGR of 24.9 percent through 2010-2015.

The figure below is taken from the report and shows smartphone shipments for the period 2008-2015.

Figure 1: Smartphone Shipments - Worldwide (In Million, 2008 - 2015F)

F - Forecast Source: Portio Research Ltd.

Smartphones are gaining popularity in all regions worldwide. As a result, smartphone shipments as a percentage of handset shipments are expected to increase through 2010-2015.

Figure 2: Smartphone Shipments as a Percentage of Handset Shipments - Worldwide (In Million, 2008 - 2015F)

F - Forecast Source: Portio Research Ltd.

The increasing availability of high-speed networks is further fuelling data usage among mobile users. While the emerging markets have started exploring 3G benefits, developed markets are witnessing 3.5G and 4G deployments.

The mobile applications user base is expected to grow at a CAGR of 42.8 percent between 2010 and 2015 to reach 438.9 million by end-2015.

The worldwide user base for mobile applications stood at 73.9 million at end-2010. With smartphone vendors, software developers and MNOs making huge investments to improve the quality and utility of mobile apps, the mobile applications user base is expected to grow at a CAGR of 42.8 percent between 2010 and 2015 to reach 438.9 million by end-2015. The reason behind this high number is the widespread availability of free applications, increasing range of applications, affordable data plans and increasing smartphone penetration - especially in the Asia Pacific and Rest of World regions. Worldwide, the percentage of mobile users downloading mobile applications is expected to grow from 1.4 percent at end-2010 to 5.9 percent by end-2015.

North America had the largest regional user base of mobile applications in 2010, constituting 36 percent of the worldwide mobile application user base. It was followed by Asia Pacific and Europe, with 29.9 percent and 27.7 percent shares respectively. The figure below breaks out the worldwide mobile application user base in 2010 by regions.

Figure 3: Worldwide Mobile Application Users - Regional Contribution (In Percent, 2010)

Source: Portio Research Ltd.

Asia Pacific's smartphone shipments and user base witnessed an upsurge during the first quarter of 2011, despite...

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