Apps don’t generate revenue and don’t attract customers

Consumers’ appetite for downloading apps appears to be over; normal call and text services remain the most heavily used revenue generating functions on mobile phones, research commissioned by OpenCloud has found.

In a survey of 1,000 UK consumers, 45% of all mobile users have the ability to download apps but only 39% of those who can downloads apps, regularly do so. Significantly, 38% of smartphone users only download free apps, while 50% of smartphone users downloaded no apps in the last month.

By far the most frequently used function on mobile phones is still text messaging, with 83% regularly doing so compared with the other top five features: taking pictures (47%); mobile internet (29%); storing and playing music (28%); and emailing (22%).

The mobile phone is certainly more than just a telephone, however these top five uses are local features of the mobile device itself and do not deliver incremental revenue to the operator.

OpenCloud’s My Mobile Lifestyle 2010 survey, conducted by research agency Loudhouse, looked at consumer attitudes to mobile phone usage, beyond just voice calls, in particular apps, and the types of services they desire. These significant findings are a warning to operators who have been tempted by the siren call of the App Store.

Consumers care more for the functionality of their mobile phones and the pre-loaded key apps, such as location-based services and social networking, than downloadable apps themselves.

The research also found that the typical user does not make much use of their apps once they’ve downloaded them following the initial app download honeymoon period. For example, by far the most frequently used function on mobile phones is still text messaging, with 83% regularly texting.

Additionally, the revenue generated from app downloads is perhaps not the nirvana first hoped for as half the respondents only downloaded free apps anyway. The research strongly suggests that operators should concentrate their app strategy on enhancing their traditional comms services and delivering rich communication services, as this is their core skills area and what the users value in their phone.

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