The ‘Mobile Market Trends UK: Usage and Revenue Forecasts to 2015’ report shows that revenue growth will primarily be driven by increased mobile advertising spend, especially around 'conversational advertising'. The mobile advertising market is forecast to grow from £50.25 million in 2010, representing 12% of total revenues, to £357.84 million in 2015, representing 33% of total revenues, as advertisers increasingly target this direct channel.
At the same time, content and services will see revenues grow from £336.73 million this year, 83% of total revenues, to £703.53 million in 2015, at 64% of the total, with monetary growth coming from increased spend on mobile apps, mobile gambling and mobile games.
"The apps market is exploding and revenues over the forecast period are forecast to grow 350% from £28.29 million to £130.21 million, excluding games downloads," said Gavin Patterson, chief markets analyst at mobileSQUARED, and author of the report.
Patterson added that the apps market will contribute 9% of total content and services revenue this year and 19% by 2015, a CAGR of 28.5%.
Overall, mobileSQUARED estimates 81.04 million mobile subscriptions in the UK by the end of 2010, increasing 6% to 85.97 million by the end of 2015. Total subscriptions to 3G services and above will rise 62.2% over the period, from 31.59 million to 51.24 million, while users of more basic talk and text packages will fall almost 30% from 49.45 million to 34.73 million.
The report forecasts a total of 19.97 million mobile internet users by the end of this year, representing 25% of the total mobile population, and 63% of 3G subs. Mobile internet users will rise to 37.72 million by 2015, representing 44% of total subs and 74% of 3G subs.
"Smartphone users will increase 106% over the period from almost 20 million to more than 50 million, primarily driven by sales of Android devices and other smartphone operating systems," said Patterson. "This year is definitely something of a spike in UK sales for the iPhone, and growth will fall away moving forward as more Android devices enter the market, and Nokia getting their act together in the smartphone market as well."
The report also forecasts that 83% of the UK population will own a mobile phone in 2010, and the single largest group of subscribers will be aged 25 to 44, followed by the 45 to 64 year olds and then 15 to 24 year olds.