UK at app saturation

Warc, 19 August 2014

LONDON: The UK app market has reached saturation level, with average monthly downloads having fallen significantly during 2014, according to a new report.

Deloitte, the business consultancy firm, said that among those consumers who downloaded apps, the average monthly number of such downloads had decreased from 2.32 last year to 1.82 this year.

At the same time, the proportion of smartphone and tablet owners who never downloaded any apps was increasing, from less than 20% to 31%.

"We are reaching a limit in the UK in the volume of app store downloads," claimed Paul Lee, analyst at Deloitte.

"Each additional new smartphone [owner] has less inclination to download apps, either out of apathy or, at a more global level, affordability," he explained to the Financial Times.

And in any case, in a mature market many consumers already have all the apps they want to use. "Ironically the better that apps get the longer people will keep them meaning people feel less inclined to look for new apps," he said.

The overall size of the app market is not decreasing, however, as Lee noted a rise in the number of "casual users" using fewer apps within a larger smartphone market.

But with nearly 90% of smartphone users claiming never to spend money on apps, or any other smartphone content for that matter, the FT observed that this "will raise questions about the size and profitability of the mobile market for games makers and other producers of mobile media".

Another factor which may be at work was highlighted earlier this year in Deloitte's Technology, Media & Telecommunications Predictions for 2014 which suggested that 2014 would see a significant increase (25%) in smartphone penetration among the over-55s, taking it to around 50%. But this age group tends not to make full use of the device's capabilities, with many continuing to use it like a feature phone.

A separate survey earlier this month by price comparison site uSwitch.com found that apps were a primary concern for only one in ten UK consumers choosing a smartphone – most were more interested in functionality, reliability and good design.

Data sourced from Financial Times, Deloitte; additional content by Warc staff