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MOBILE CONTENT MARKET
IN FINLAND
2012–2016
NOVEMBER 2013
Preface
This report looks at the mobile content services market in
Finland with a broad scope. The market size and drivers
for mobile content services, mobile marketing and mobile
device base are studied in the report. Market size for
mobile content services is presented mainly for the years
2010–2016; some statistics may also cover earlier years.
The market data for the years 2008–2012 are actual figures
based on data gathered for this and earlier reports. Years
2013–2016 are forecasts based on market analysis and
up-to-date information available on the market. All the
market figures and other content in this report are based
on analysis by Idean’s consultants and represent their views
and opinions.
The report is commissioned by Teleforum ry and funded
by Tekes. This report is part of a larger project in which
Teleforum is looking for ways to help the Finnish mobile
ecosystem to create the next mobile success stories.
Contents
4Introduction
6Summary
10
Key trends and observations
14
Total market
17
View on the global market
20
Application stores
26
Installed apps
28
Application stores & device bases
30
SMS Services
32
Premium rate calls
34
Device base
38
Smartphone penetration
40
Mobile marketing
42
Interviews & Steering group
The purpose of the report is to provide an overall view of
the mobile content market dynamics in Finland. The report
aims to help players in the mobile content market to develop services based on up-to-date market data. The focus
of the report is in mobile consumer services.
The report is carried out as a combination of desktop and
interview study between August and October 2013. The report’s findings are based on in-depth interviews with players in the mobile content market and other market experts
as well as Idean’s database on mobile content services. A
steering group was formed to bring industry expert input
and feedback to the report. The members of the steering
group included leading Finnish experts working in global
and national companies. All this data has been complemented with publicly available sources. The author of the
report is Kalle Snellman, Senior Strategist at Idean. Idean’s
designer Lauri Lankinen has done the editorial work and
created the visual layout.
The author would like to thank all the interviewees and
steering group members for devoting their time and effort
in contribution to this report.
2
3
Introduction
Mobile services have been topical since the late 1990’s.
During the first ten years mobile commerce was dominated
by a handful of players specialized in mobile content. Now
the situation has changed, as an increasing amount of the
total online consumption is moving into mobile devices.
This trend affects practically all organizations from different
industries. Many of the companies and authorities that
have ignored or taken only minimal steps in the first phase
of mobile services, have now implemented mobile services
or have serious plans for implementations. In fact, all organizations have become more or less technology oriented
and dependent.
The current media coverage on mobile issues draws a picture of mobile application dominated mobile commerce.
Mobile applications, however, represent only a small share
of the total mobile originated content revenue. The majority of the revenue is still delivered by premium rate calls
and SMS based services. On the other hand, only a part of
the mobile services are expected to bring direct revenues.
The author of this report has acknowledged that mobile is
increasingly difficult to define. The distinction between mobile and desktop usage and services used to be rather clear
as there used to be separate SMS based services and mobile sites for mobile devices. Today an increasing number of
online services are designed for both mobile and desktop.
Moreover, a growing number of services and interfaces are
becoming hard to define as either of these, making it difficult to draw a line between mobile and desktop.
Definitions
Mobile content market value
Represents end-user spending on
mobile services within the addressed
distribution channels. The spending
is divided into domestic and export
markets. The domestic market is
further divided into four main categories; SMS based content services,
premium rate calls, application stores
and other. All of these categories are
then analysed separately. Also media
spending on mobile marketing channels is included in the market value.
Mobile advertising market value
The market value of mobile advertising consists of expenditure on mobile
media. In other words, the money
spent on SMS traffic, search and
banners in a mobile media space.
Mobile site design and other similar
costs related to mobile marketing are
excluded from the market value.
Smartphone
A smartphone is a mobile phone
built on a mobile computing platform
with more advanced computing abilities and connectivity than a feature
phone has. One of the most significant differences is that the advanced
application programming interfaces
(APIs) on smartphones for running
third-party applications can allow
those applications to have better
integration with the phone’s OS and
hardware than typical feature phones.
Currently smartphones include
devices with the following operating systems: iOS, Android, Windows
Phone, Symbian, BlackBerry OS,
Bada and Meego.
Feature phone
A feature phone is defined to cover
all other mobile phones than smartphones in this report.
Consequently the report looks at those aspects of mobility
that are possible to measure. The focus of the report is on
the mobile content service revenue in Finland. Additionally the mobile device base is covered in the report. These
aspects will give an overall picture of the mobile market in
Finland. The aim of the report is to give service providers
relevant, up-to-date and consistent information regarding
the mobile market so that they can make solid and wellreasoned business plans and decisions.
4
5
Summary
Figure 1.
Total mobile content revenue in Finland
1 596
2008–2016 (M€), including mobile
content export
1 399
The mobile content services market
1 233
revenue is booming in Finland, when
looking at the combined revenue from
1 025
domestic market and export. The Majority
of the growth in 2013 is generated by
The mobile content services market revenue is booming
in Finland, when looking at the combined revenue from
domestic market and export. The total market for mobile
content grew 31 % in 2012 to 404 million euros. In 2013
the market growth is anticipated to accelerate and the total
revenue to exceed one billion euros, which is a 154 % upswing over 2012. The majority of the growth in 2013 is generated by mobile content export. During the past couple
years and in the near future the growth has been and will
be dependent on a couple of leading mobile companies in
Finland. For example, the growth in 2013 was almost solely
due to Supercell’s spectacular revenue growth.
The mobile content export grew from couple of million is
2010 to 164 million euros in 2012. In 2013 the revenue is
forecast to reach 790 million. Concurrently the domestic
market sales reached 240 million euros in 2012 and is forecast to decrease couple of percent to 234 million euros.
The revenue trends in the domestic market vary sharply by
mobile content category. The overall market is shrinking
due to declining sales of premium SMS and premium rate
calls. At the same time the mobile application, marketing
and other mobile services are growing sharply. Together
these three categories will surpass the combined domestic
SMS and premium rate call revenue in 2015. The total domestic market revenue starts to grow again in 2014 despite
the decreasing SMS and premium rate call revenue.
mobile content export, which has been
exploding due to Supercell’s spectacular
154 %
success.
Source: Idean, 2013
404
308
31 %
252
262
–1 %
4 %
2008
2009
2010
2011
2012
2013
2008
2009
2010
2011
2012
Mobile marketing
9
11
13
14
Other mobile services
–
–
1
3
Application stores
–
–
2
69
69
177
172
256
20 %
13 %
14 %
2014
2015
2016
2013
2014
2015
2016
17
23
35
48
62
8
16
32
51
75
4
10
16
25
35
36
70
70
63
55
46
39
34
172
172
143
124
107
89
18 %
Figure 2.
Domestic mobile content market revenue
by service category 2008–2016 (M€)
Mobile content demand is strongly shifting
to new forms of services. Other mobile
services category is showing the strongest
growth in the coming years. It consists of
estimated mobile spending on various
services, including subscription services
such as Spotify or Netflix.
Source: Idean, 2013
Current media attention seems to focus on the competing
mobile platforms and the fight between mobile application
stores. All this leaves an impression that mobile application
stores are huge revenue generators. This is not the case at
least yet and in Finland. Mobile application store revenue
represented approximately 4 % of the total domestic mobile content market revenue. SMS and premium rate calls
bring vast majority of the domestic revenue today.
Another interesting trend is that a growing share of the
mobile application spending is going through alternative
channels to application store billing. For example most
6
Premium SMS
Premium rate calls
256
252
257
263
240
234
245
262
82
290
7
6 029
of the leading subscription services, such as Spotify and
Netflix, are invoicing customers directly via credit card.
This revenue is considered in the “other mobile services”
category.
The mobile device user base is changing rapidly in Finland.
The majority of mobile phone users have smartphone and
a tablet device was in every fourth household in Finland
in the fall of 2013. This trend is projected to continue as
smartphones and tablets dominate the sales charts. In
2013 there will be three smartphones sold per one feature
phone and it seems likely that soon the smartphones will
be the only option available in stores. Tablet devices exceeded laptop unit sales in the first half of 2013 in Finland.
At the same time there are several new device categories
emerging, such as smartwatches, different smart wristbands, glasses and other wearable computing devices.
5 599
5 060
5 010
Feature Phones
4 402
4 095
3 703
3 297
2 905
2 598
1 991
1 940
1 570
1 453
Smartphones
1 237
971
885
429
Tablets
143
13
2010
2011
2012
2013
2014
2015
2016
Source: Idean, 2013
Figure 3.
Smartphone, tablet device and feature
Feature phones are gradually disappearing from stores and our everyday life. Tablets and
smartphones are becoming consumers’ primary internet devices.
phone population in Finland 2010-2016
(in thousands)
8
9
Key trends and observations
10
Bio authentication is growing
mainstream
Walled gardens rule the current
world, but the future is open
Despite the array of choices there
are only few dominating services
per business area
Can legacy businesses keep up with
the mobile development?
In Idean’s opinion biometric authentication
Mobile app ecosystems by Apple, Google,
Successful services are concentrated in
Mobile technologies provide a potential to
will be the most significant disruption in
Microsoft and other likes, try to lock their
select business area. For example Spotify
change legacy business processes and they
the foreseeable future. Our everyday life
customers in walled gardens, where all the
is dominating music subscription services,
certainly have done it. Take for example
is full of physical practices where personal
data transfer and monetary transactions
Netflix is dominating video, Ilta-Sanomat
Uber, which is changing the way we use
access is required in one way or another. For
occur inside the same ecosystem. A cus-
and Iltalehti command media and Facebook
taxi services or Netflix that is transforming
example we have car and house keys, bank
tomer would rather not let move between
rules social media. The other players in the
the way we use TV. All this raises concerns
accounts, credit cards, concert tickets not to
ecosystems. This is not the first time we are
same business areas are defenders. In the
regarding traditional companies’ ability to
mention all the online and mobile services
living a walled garden era in mobile content.
long run the list of dominating players might
respond to these new challenges. Quite
that require a username and password. A bio
Operators had a similar attempt a good
change, but the general set-up remains.
often the traditional companies rely on a
authentication could change all of these cur-
decade ago. However, nothing seems to be
On the other hand, some business areas
legacy business model and introducing a
rent practices. Take for example usernames
shaking the growing influence of the current
are more inclined to this kind of set-up than
mobile service would potentially cannibal-
and passwords. We could forget all the
ecosystems.
others. Moreover, the consumer services
ize its current revenue streams. Changing
market seems to live in 5 to 7 year cycles,
completely to a new business model would
hassle with dozens of passwords if we could
have bio authentication. As a sign of this
Nevertheless, the history has proven that
where new practices appear and replace the
be risky and could probably lead to decreas-
development Apple introduced a fingerprint
there will always be a new disruption that
existing ones. For example, currently the
ing revenue. At the same time there are
authentication in its latest iPhone. Even
shakes the current status quo. What this will
most successful business model in mobile
newcomers in the market that apply new
more interesting developments are bubbling
be and when it will happen is not clear. How-
gaming is free to play combined with in-app
business models and decrease the legacy
under. It seems likely that one practical way
ever, there seems to be a growing sentiment
purchases, whereas a couple of years ago
company’s market share. Many traditional
of executing authentication would involve
against the currently leading ecosystems.
the best selling games were paid ones.
companies are stuck on this kind of di-
dedicated devices. For example, a Canadian
Mobile game providers are perhaps the
Consequently the only goal in these kinds of
lemma. Which is better, to maintain legacy
company called Bionym is developing a
happiest with the current ecosystems, but
markets is the pole position.
business with decreasing revenue or to jump
wristband named Nymi that makes an au-
many others are discontent on for example
thentication based on the user’s heart wave.
their visibility in the stores, customer data
The fundamental problem with online, and
and decreasing revenue? Additionally there
The wristband is then connected to one’s
processes and the revenue sharing policies.
especially mobile services, is how to success-
is a competence gap for developing new
device and app to complete the intended
fully introduce a new service for the target
services in traditional companies. All this
task. It will take a while before these solu-
audience. Many users are typically following
leads to cautious service development and
tions are integrated into our front door locks
the masses and using the services that are
traditional companies seem to lag behind in
and bank accounts. But once they start to
already popular.
the service development.
into a new business model with high risks
spread, we might be surprised by the speed.
11
Sensors accelerating the mobile
revolution
TV set has become the second
screen
Wearable computing is taking its
first steps to masses
Analog customer will disappear
Big data hype has peaked
Adjust home heating, lightning. See who
There has been an on-going debate on the
Smartwatches are available in the stores
In the foreseeable future it will become
Big data has been well represented in vari-
is ringing your doorbell. Control your car.
so-called “second screen”, which typically
and smart glasses are expected to hit the
harder and harder to create and keep a
ous keynotes and press articles. It is said to
Monitor your sleeping baby. Follow your
refers to the use of a mobile device while
market soon. There are many who are more
customer relationship without some kind of
be the vital for today’s marketing, sales and
health. Make fitness plans. Sensors will
watching television. So far the traditional TV
or less suspicious about the success of these
digital aid, whether it is mobile app, some
other business. In the reality there are only
enable many of these actions, whether
manufacturers have failed to provide solid
product categories. Equally there are strong
sort of analytics and big data. This concerns
a handful of companies that utilize big data
they are stand-alone or embedded into
experiences that would combine TV set and
believers for their future success. Either
all sorts of industries and size of businesses.
in a large scale for driving their business
our devices. Today the sensors are not
other appliances in a manner that would
way, it seems inevitable that the number of
The need for analytics and data collection is
operations. However, companies are increas-
mainstream in our homes and other
appeal to large masses. Instead the mobile
smart devices and sensors around our bod-
one of the corner stones in the design of the
ingly aware on the benefits of analytics
environments, but they will most likely
devices have become the primary screen
ies will grow whether they are embedded
modern mobile services today.
and the general know-how is increasing in
quietly sneak into our everyday life. All of a
for many users and the TV set is seen as the
in our clothing or separate devices. The
sudden the next lamp we purchase may have
“second screen”. The primary attention is fo-
consequences may be difficult to predict,
a motion sensor or our insurance company
cused on the more interactive device, which
but they surely have many, even dramatic
requires a moisture meter into our bathroom
is at this moment a smartphone or a tablet.
effects on interfaces, business models and
companies.
our everyday life.
for getting discount in insurance fee.
Key trends and observations
Business models favor subscriptions
and in-app purchases accompanied
with analytics
Open API is becoming an
increasingly critical asset for digital
services
Phablets are about to break through
The services will know an increasing
amount of facts about you
Devices will be less visible in
everyday life
Today’s most successful global mobile rev-
Open API (Application Programming
The average screen size of the smartphones
Mobile services provide another extension
Smartphone and tablets are with us at
enue generators are gaming companies that
Interface) has been the key enabler in
is closing the smallest tablets. These devices
for gathering more information about us
homes, workplaces, bus stops, cafes and
provide free-of-charge downloadable games
application stores’ and leading social
are sometimes called “phablets” and they
and whether we like it or not, our ability to
other places. In the long run these physical
with premium priced in-app purchases.
media platforms’ success. This model
have experienced phenomenal growth in
control privacy is diminishing. All sorts of
devices will be less visible as wearable
The gaming experience is continuously
is being copied into other industries in
shipments across the Asia-Pacific region.
personal and other customer information are
computing and various kinds of sensors de-
developed and adjusted according to the
an accelerating pace. Most notably the
This trend is expected to hit also Finland.
aggregated from different sources in order
velop and spread. The services will become
gathered customer data and analytics tools.
governments are providing access to many
to offer us personalized services. There are
more automated and they serve us without
This seems to be the current secret sauce of
of their data assets.
two sides in this coin. At its best we will be
having a device in our hands. Moreover, the
better served. At worst our personal data
service design in general is moving towards
is misused. At the same time people are
services that anticipate our intentions and
increasingly aware how much their personal
thus making many of the current practices
data there is out in the services. The demand
unnecessary.
success, at least for the mobile games.
for accessing their personal data is increasing. This is a major political and legal issue
that cannot be solved by individual country
legislation, which complicates the potential
resolution to this problem.
12
13
Total market
Figure 4.
Total mobile content revenue in Finland
1 596
2008-2016 (M€), including mobile
content export
The mobile content services market
revenue is booming in Finland, when
looking at the combined revenue
from domestic market and export.
The total market for mobile content
grew 31 % in 2012 to 404 million euros. In 2013 the market growth is anticipated to accelerate and the total
revenue to exceed one billion euros,
which is a 154 % upswing over 2012.
The Majority of the growth in 2013 is
generated by mobile content export.
During the past couple years and in
the near future the growth has been
and will be dependent on a couple of
leading mobile companies in Finland.
For example, the growth in 2013
was almost solely due to Supercell’s
spectacular revenue growth.
The future projections for the years 2014-2016 are speculative considering the heavy influence of a few individual
companies and the unpredictable nature of their business
environment. Here we have predicted rather stable market
growth, but in practice the export market may prove to
be rather volatile. The domestic market development has
proven to be less volatile.
1 399
The mobile content services market
1 233
revenue is booming in Finland, when
looking at the combined revenue from
1 025
domestic market and export. The Majority
of the growth in 2013 is generated by
mobile content export, which has been
exploding due to Supercell’s spectacular
154 %
success.
Finland has had the fortune to host a couple of the most
successful mobile gaming companies. Their impact in the
total market revenue is substantial. Without Rovio and
Supercell the growth rate of the total market would not
have been so rapid.
Source: Idean, 2013
256
Media attention is practically fully focused on mobile
applications as far as mobile content is concerned. Still,
premium rate calls and premium SMS services bring the
vast majority of the domestic industry revenue today.
The mobile content service market in Finland roots back
to the early 1990’s, when premium rate calls emerged. The
first SMS based logos and ringtones were delivered over
the mobile networks in the latter part of 1990’s. Approximately ten years later application stores for smartphones
appeared. All these markets co-exist today and will continue to do so in the near future.
404
2008
Figure 5.
252
262
–1 %
4 %
2009
2010
Domestic
308
31 %
20 %
18 %
2011
2012
2013
2014
13 %
14 %
2015
2016
Export
Total market divided into domestic and
export revenue in Finland 2008-2016 (M€)
Mobile content export has exploded
1 307
recently and is going to overtake domestic
market revenue in 2013. However, the
The demand for premium rate calls and premium SMS
services has saturated and is gradually declining. At the
same time the overall usage of mobile services is growing
strongly. Mobile applications and browsing are among the
fastest growing mobile services. This doesn’t necessarily
translate to revenue since a major share of the applications and browsing are free of charge, except for the data
transfer costs billed by mobile operators. More specifically,
an increasing number of services apply business models
that are not aimed at bringing direct revenue.
At the same time as the application stores grow at the
expense of SMS and premium rate call revenue, the focus
14
1 136
domestic market development seems far
988
more predictable than the volatile export.
790
Source: Idean, 2013
256
263
257
252
0
1
5
2008
2009
2010
240
164
234
245
262
290
45
2011
2012
2013
2014
2015
2016
15
TOTAL MARKET
VIEW ON THE GLOBAL MARKET
of the whole business is moving from national to global.
Traditional SMS and premium rate call payments have
been and still are very much locally controlled by domestic
operators. Application stores are global and have hardly
any operations on a country level. This doesn’t mean that
it would be impossible to make a successful service with a
national single country focus. Great opportunities lie in the
global market, however.
Mobile applications have made the world smaller for mobile service providers. Today it is possible to reach global
masses with just one contract with an application store.
This certainly differs from the SMS based mobile business
environment, where it was costly, risky and difficult to do
business internationally. The SMS based mobile business
was more national in its nature. Another difference is the
selection of competing services. In the SMS era there were
roughly a dozen of ringtone service providers. These same
players also dominated the mobile games and logo business. In today’s application stores there are almost endless
numbers of competing services and service providers in the
most popular application categories.
On the other hand, the best selling mobile services with
a domestic focus in Finland beat Rovio’s or Supercell’s
domestic revenue. Take for example Fonecta’s SMS and
premium rate call based directory services that are still
bringing tens of millions in revenue annually. At the same
time Supercell’s and Rovio’s combined revenue in Finland is
a couple of million euros. The vast majority of their revenue
is global.
There have been several global success stories in the
mobile application market, but Rovio and Supercell have
definitely been among the most spectacular success stories. Rovio and its Angry Birds was one of the first games
that made a significant breakthrough in the Apple App
Store. Supercell is the most successful application provider
using free-to-play model so far.
Differences between Rovio’s and Supercell’s business models illustrate the fast pace of the changes in the market.
Angry Birds’ revenue model was originally predominantly
based on paid downloads. This was the secret sauce for
success in 2009–2011 in mobile apps. Supercell’s games
are based on a free-to-play model, meaning the game is
free to download but the user can make in-app-purchases
to speed up progress in the game.
16
New success stories appear constantly in the application
market and hardly any of them have a legacy in SMS based
mobile services. The list of the most successful mobile
application players include companies such as Supercell,
Electronic Arts, King, Kabam, Gameloft and Rovio. Many of
these companies have become significant in their industry
in a matter of a couple of years. On the other hand, it
should be remembered, without undermining their success
that the scale of their revenues hardly bring them anywhere
close to global fortune 500 company lists.
The mobile application market is highly volatile and the
winners may quickly turn into losers. It resembles billboard
charts in the music industry, where hit songs typically climb
quickly to the top but fall down equally fast.
On the other hand there have been signs of opposing
developments. A couple of the current top revenue generating services in Apple’s App Store have remained at the
top for a surprisingly long period. For example Supercell,
the publisher of Clash of Clans and Hay Day has had two
games among the top ten best selling applications in the
App Store for over 12 consecutive months in many countries. King, the publisher of Candy Crush Saga, has also
been at the top in multiple countries since 2013. Both of
these companies are applying a free-to-play –model.
17
VIEW ON THE GLOBAL MARKET
The application stores publish top chart lists on a national
level. The list of the top 5 grossing applications in Finland
and in the US looks similar. the Same applications top the
charts in both countries with a few exceptions.
552
(Apple’s 30% cut)
Supercell
Apple’s App Store takes 30 % revenue share from all the
application purchases in the store. The App Store is the
globally leading application store in terms of revenue.
Apple has not published the App Store’s revenue, but it
has sporadically stated how much developers have been
paid. For example, according to a press release in May
2013 Apple had paid developers 9 billion dollars (6,8
billion euros) since the launch of the App Store. Based on
the earlier announcements one can calculate that in 2012
the total App Store revenue was approximately 4,3 billion
dollars (3,2 billion euros). Apple’s 30 % cut of this sum was
roughly 1,3 billion dollars (1 billion euros) in 2012. In 2013
the total revenue is forecast to exceed 7 billion dollars (5,3
billion euros). Apple has also other mobile revenue, such as
mobile advertising and iTunes, not included in this report.
18
974
Apple App Store
Global application stores typically take a 30 % revenue
share from the purchases made in the stores. Typically the
purchases are made with a credit card. Google Play and
Windows store allow also purchases through the mobile
phone bill.
Supercell is the fastest growing company among the ones
studied in figure 6. In fact it might be among the fastest
growing companies ever globally, especially when considering profitability. It is probably also the top selling mobile
company in the App Store in 2013. In October 2013 the
company released Clash of Clans for Android, which will
likely bring another revenue stream for the company. King
is probably the second best selling company in mobile
apps market. According to press articles it has filed an IPO
in the US. Emerging growth companies such as King can
use a secretive IPO registration process in the U.S. and the
financial details were undisclosed at the time this report
was written.
391
Facebook
78
196
Electronic Arts
113
Kabam
76
106
Gameloft
56
175
Zynga
43
Glu Mobile
82
63
Rovio
2013 forecast
2012
2011
84
53
100M
300M
500M
1 000M
1 500M
2 000 M€
Sources: Facebook, Supercell, Electronic Arts, Zynga, Rovio, 2011 & 2012; Estimates by Idean, 2013
Figure 6.
Estimated global mobile revenue of
selected companies (M€)
Companies’ mobile revenue has been extracted from their total revenue, and their
mobile revenue for 2013 has been estimated. Facebook’s revenue is mainly from mobile
advertising and Apple’s App Store stands for Apple’s cut on the total App Store revenue.
Other companies in the chart are gaming companies.
19
Application stores
Figure 7.
184 %
Total application store revenue in Finland
2010-2016 (M€)
Application store revenue is forecast to
36
show healthy growth in the coming years.
The mobile applications market value
in Finland was ten million euros in
2012, including revenue from App
Store, Google Play, Windows Marketplace and Nokia Store. Apple’s
App Store was the largest in revenue
among the ones mentioned, with
approximately 80 % share of the total
revenue in 2012. Due to application
stores’ global nature only a small
portion of the domestic revenue was
generated by Finnish companies and
remained in Finland.
The growth was due to an increased smartphone user base
as well as greater supply of applications. There is also a
growing amount of Finnish applications available, which
has been followed by increasing marketing activity related
to them. In the following years the growth rate is forecast
to slow down despite the on-going growth of installed
base of smartphone and tablet devices. The future user
base growth is anticipated to come from less active mobile
service user segments as the most active early adopters
already have smartphones and tablets. Moreover, many of
the major content players are expected to introduce services based on alternative billing mechanisms for application
stores. For example browser-based services, where service
providers can choose between a large selection of different
billing methods. In 2016 the total application store revenue
is forecast to be approximately 36 million euros.
Apple’s App Store is the largest application store in
Finland, when considering the combined iPhone and iPad
revenue. In 2012 Apple App Store sales represented 81%
of the total application store revenue. Google’s application
store has as of yet failed to generate considerable revenue.
It has been less efficient in attracting users to buy than Apple’s. However, Google Play is forecast to show the fastest
growth in the coming years and to bypass Apple’s revenue
in Finland. This is mainly due to Android’s growing dominance in the device population and consequently service
providers growing interest around Android. On the other
hand, iOS also remains attractive due to its solid device
range compared to high fragmentation of Android devices.
35
However, the growth could be even greater
if some of the leading subscription service
providers, such as Spotify or Netflix would
25
charge their services via application stores.
130 %
Source: Idean, 2013
16
10
60 %
57 %
4
37 %
2
5 %
2010
2011
2012
2013
2014
2015
2016
2010
2011
2012
2013
2014
2015
2016
Figure 8.
Application store revenue by platform in
Finland 2010-2016 (M€)
Apple’s App Store has dominated the
application store revenue in Finland and
globally. Google Play will challenge its pole
position in the future thanks to fast growing
Android device population. The growing
installed base of Android devices will be
followed by increased developer interest.
Windows devices are well represented
Recently the growing Windows Phone device user base
has attracted Finnish mobile service providers to create services for Windows Phones. Finland probably has en exceptionally wide selection of Windows applications dedicated
to the domestic market when compared internationally.
Now the situation might change after the Nokia-Microsoft
deal, if the Nokia brand disappears from Windows devices.
Part of the success of Windows Phones has certainly been
based on patriotism and the strength of the Nokia brand
in Finland.
Apple has made it difficult for application providers to use
any other billing channel than App Store’s own channel for
20
in the Finnish market. However, their
application sales suffers from smaller
developer interest and application range.
Source: Idean, 2013
Windows Marketplace
–
–
0,6
1,6
3,4
4,9
4,4
Google Play
–
0,3
0,9
3,5
8,2
14,8
17,1
Apple App Store
0,9
3,5
8,1
10,6
13,3
14,7
14,7
Other
0,6
0,6
0,5
0,4
0,2
0,1
1,5
4,4
10,0
16,0
25,1
34,6
0,1
44,0
21
APPLICATION STORES
App Store Finland 28.8.2010
App Store Finland 28.8.2011
App Store Finland 28.8.2012
App Store Finland 28.8.2013
5 Angry Birds - Rovio
1 Sieniopas - Mobiteos
1 Clash of Clans - Supercell
1 Clash of Clans - Supercell
4 booxTV - Booxmedia Ltd
3 booxTV - Booxmedia Ltd
2 TVkaista - Delta Vee
8 Tvkaista - Delta Vee
5 Karttaselain - AccelBit
7 Karttaselain - AccelBit
5 Karttaselain - AccelBit
10 Sieniopas - Mobiteos
10 Angry Birds - Rovio
9 Hay Day - Supercell
6 Hay Day - Supercell
Entertainment Ltd
Entertainment Ltd
paid downloads or in-app purchases. However, not all successful mobile application providers are invoicing through
application stores. For example international publishers
that have a strong presence in Finland, such as Netflix or
Spotify, invoice their customers via other channels. These
services are mainly billed via credit cards. In addition
companies in the traditional media business are often
utilizing alternative billing channels. The reasoning for
using alternative channels is in the revenue share models;
application stores take a 30 % cut of the sales compared
with credit card companies’ couple of percent cut.
15 ReittiGPS (Reittiopas
15 Angry Birds Seasons - Rovio
iPhonelle) - Essentia
Solutions Oy
Entertainment Ltd
iPhonelle) - Essentia
iPhonelle) - Essentia
Solutions Oy
Top Finnish application publishers
Application stores publish top charts by country and the
lists are further divided into different application categories. In this report Idean has looked at the overall category
for the top 100 grossing iPhone apps in Finland and in
the U.S. Both lists identify Finnish publishers to illustrate
where they in the ranking. The lists in this report represent
only one day from each year. Moreover, only the apps
for iPhone have been reviewed. The aim of this particular
exercise is to give an overview of the state of the market,
not to provide a full analysis of all stores.
- Sanoma News
22 ReittiGPS (Reittiopas
iPhonelle) - Essentia
Entertainment Ltd
30 Sieniopas - Mobiteos
26 Nautics Sailmate - Nautics
39 Angry Birds - Rovio
40 E-kontakti.fi - Suomen
46 Karttaselain - AccelBit
80 TVkaista - Delta Vee
85 Älypää - Sanoma
Entertainment
86 Fatcat Rush
- Tomodomo Oy
78 FinnBirds - Kari Kulmala
21 HS - Helsingin Sanomat
26 TVkaista - Delta Vee
- Foreca Ltd.
Innovations
Solutions Oy
18 Sieniopas - Mobiteos
31 Angry Birds Rio - Rovio
Dictionary - Kangas Bros.
Global application stores should be put into context in
order to understand their current magnitude. For example
Netflix’s global revenue in 2012 was $3,6 billion (2,7 billion
euros) and Apple’s App Store’s total revenue approximately
$4,3 million (3,2 billion euros) according to Idean’s estimate. Apple’s 30 % cut of the revenue in 2012 was roughly
$1,3 billion (1 billion euros). In other words, Netflix’s
revenue was almost three times Apple’s cut.
- Ilmatieteen laitos
22 ReittiGPS (Reittiopas
Experience Oy
54 Finnish-English Translate
20 RainMan (Ilmatieteen laitos)
18 ReittiGPS (Reittiopas
17 Viiniopas - Monkey
25ForecaWeather
7 booxTV - Booxmedia Ltd
Solutions Oy
Entertainment Ltd
suurin deittisivusto sinkuille
41 Amazing Alex - Rovio
- Intodate International AB
Entertainment Ltd
48 Autorekisteri.fi
- Nelumbo Oy
92 Angry Birds Friends - Rovio
Entertainment Ltd
95 HS - Helsingin Sanomat Sanoma News
98 Finnish-English Translate
Dictionary - Kangas Bros.
Innovations
App Store U.S. 28.8.2010
App Store U.S. 28.8.2011
1 Angry Birds - Rovio
5 Angry Birds - Rovio
Entertainment Ltd
73 Angry Birds Seasons - Rovio
Entertainment Ltd
92 Rasmus Nalle - Egmont
Kustannus
App Store U.S. 28.8.2012
3 Clash of Clans - Supercell
Entertainment Ltd
17 Angry Birds Seasons - Rovio
Entertainment Ltd
38 Angry Birds Rio - Rovio
Entertainment Ltd
App Store U.S. 28.8.2013
4 Hay Day - Supercell
12 Clash of Clans - Supercell
42 Hay Day - Supercell
36 Hill Climb Racing
- Fingersoft
46 Angry Birds Space - Rovio
Entertainment Ltd
57 Angry Birds - Rovio
Entertainment Ltd
Finnish publishers have been identified within the top 100
charts in order to understand the effect and scale of the
Finnish mobile business. Interestingly, there are many applications in the Finnish language, which are not published
by Finnish players and are thus excluded from the Finnish
application publisher lists.
The distribution of applications by nationality of publisher
reveals the global nature of the application store channel.
Finnish companies or organizations publish only a minority
22
Sources: AppAnnie; Idean, 2013
Figure 9.
Finnish publishers in the Top 100 grossing
iPhone apps in Finland and in the U.S.
Apps by Finnish companies and organizations have been identified from both Finnish and
U.S. top charts. The number of Finnish apps in the Top 100 has remained rather stabile
over the years with an average of 9 and 13 apps by Finnish publishers. A couple of Finnish
apps have made it to the U.S. Top 100—great achievement in such an important market.
23
APPLICATION STORES
of the top 100 grossing applications in Finland. Without
Rovio and Supercell, the share of Finnish publishers would
be even smaller, especially in the top 10 charts. The total
number of domestic publishers in the Finnish iPhone App
Store has varied between 9 and 13 during the period
discussed here.
The U.S. market is a good reference market. It is among
the most challenging markets to break into the top 100.
Within the timeframe of the reviewed dates there has been
only Rovio and Supercell in the top 100 charts with the exception of Fingersoft in 2013. There may have been other
Finnish apps in the top 100 had we reviewed the entire
history of the App Store.
Average number of applications in different
countries
Jan
There could be several explanations for this. Perhaps the
most significant explanation is the difference in smartphone
device population. Symbian is still strongly represented
in the Finnish smartphone market and Symbian users are
on average less active in application downloading. There
are fewer applications available for Symbian devices and
the marketplace has not become as popular as those for
iPhones and Androids.
24
Mar
Apr
May
Jun
Jul
Aug
Sep
Figure 10.
Top 5 grossing iPhone apps in the U.S.
1
in 2013
The figure illustrates the top five chart
in the U.S. during each month’s first day.
Apps that occur more than twice have
2
been highlighted. A handful of apps are
dominating the top 5 lists. Clash of Clans
and Candy Crush Saga head the lists in
both countries illustrating how international
3
the trends are in the application market.
Sources: AppAnnie; Idean, 2013
4
Clash of Clans
Minecraft
Candy Crush Saga
Hay Day
Pandora Radio
MLB.com at Bat
Modern war
5
Figure 12 illustrates the installed number of mobile applications and usage in smartphones in selected countries.
The data is provided by Google is based on smartphone
user interviews in different countries. Approximately 1000
interviews were carried out in each country annually. Smartphone users were asked how many applications they currently have in their mobile, how many of them are paid and
how many applications have they used in the past 30 days.
Finns are among the least active application downloaders
and users among the benchmarked countries. On average,
there were 20 apps installed per smartphone in Finland, of
which four were paid applications. A total of eight applications were used within the past 30 days. These numbers
are rather modest compared to other Nordic countries. For
example in Sweden, the corresponding figures were approximately double in each of the viewed metrics.
Feb
Jan
1
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Figure 11.
Top 5 grossing iPhone apps in Finland
in 2013
A total of 15 different applications have
been in the top five in the given dates in
2
both countries. The top three chart has been
stable; only 6 apps have made it to the top
in Finland compared to 8 apps in the U.S.
top three, suggesting that the top positions
3
are less windy than previously. Or more
specifically, the top players have learned
how to remain longer in the top.
4
5
Sources: AppAnnie; Idean, 2013
Clash of Clans
Candy Crush Saga
Hay Day
Whatsapp messenger
The Simpsons
25
INSTALLED APPS
40
Free Apps
Paid Apps
30
20
10
0
BRA
IND
FIN
ESP
HUN
RUS
ITA
CHN
GER
GBR
CAN
FRA
AUS
DEN
NOR
USA
JPN
SWE
KOR
7 apps used
8
8
8
9
9
9
10
11
10
12
12
12
13
12
12
8
13
11
in the last
30 days
Source: Google, 2013; Illustration by Idean
Figure 12.
Mobile application usage metrics
in selected countries, Q1 2013
Finns are among the least active application downloaders and users among the viewed
countries. On average, Finns had twenty apps installed in their smartphones, of which four
were paid apps. Perhaps the most significant explanation is the difference in smartphone
device population and more specifically, Symbian’s strong position in the Finnish market.
26
27
APPLICATION STORES & DEVICE BASES
Source: Idean, 2013
Apple iOS
ARPU per device and year (€)
iOS Device Base (‘000)
Platform total revenue
13,3 M€
14,7 M€
14,7 M€
10,6 M€
8,1 M€
2012
2013
2014
2015
2016
App Store
12,0
App Store 15,0
App Store
15,8
App Store
16,5
App Store
17,4
iPhone
497
iPhone
646
iPhone
775
iPhone
930
iPhone
977
iPad
345
iPad617
iPad 732
iPad 653
iPad Total units
842
Total units
Total units
1 263
1 508
Total units
1 583
Total units
537
1 153
17,1 M€
14,8 M€
8,2 M€
3,5 M€
0,9 M€
Google Android
ARPU per device and year (€)
Android device base (‘000)
2012
2013
Google Play
0,9
Google Play
Android Smartphone 875
Android Smartphone Android Tablet Total units
84
959
Android Tablet Total units
ARPU per device and year (€)
Windows Phone device base (‘000)
2012
258
1 746
Android Smartphone Android Tablet Total units
2015
3,4
2013
Google Play
Android Smartphone 2 306
Android Tablet 464
2 770
Total units
2016
4,4
Android Smartphone
3 113
Android Tablet 720
3 883
Total units
5,7
3 735
914
4 649
4,9 M€
3,4 M€
2014
Google Play
2015
4,4 M€
2016
Windows Marketplace
1,3
Windows Marketplace
2,0
Windows Marketplace
3,0
Windows Marketplace
4,5
Windows Marketplace
6,7
Windows Smartphone
455
Windows Smartphone
933
Windows Smartphone
1 259
Windows Smartphone
1 196
Windows Smartphone
1 136
Windows Tablet
Total units
28
1 488
Google Play
1,6 M€
0,6 M€
Windows Phone
2014
2,3
0
455
Windows Tablet
Total units
10
943
Windows Tablet
Total units
41
1 300
Windows Tablet
Total units
80
1 276
Windows Tablet
Total units
119
1 256
29
SMS SERVICES
69
69
0 %
70
1 %
70
1 %
63
55
Others
46
Figure 13.
Premium SMS services revenue in Finland
Chat & communities
39
2008–2016 (M€)
34
SMS revenue has gradually started to
Weather
decrease. The total market revenue in 2016
Ringtones
Classifieds
Interactive TV services
-11 %
will represent only half of the revenue in
-12 %
2011. Many of the current SMS services
Vehicle registry inquiries
will migrate to application based services.
-13 %
Some of the current services will cease
Public transportation
-14 %
to exist. There are hardly any new mobile
-17 %
service providers that would take SMS as
Directory services
their selected technology.
Source: Idean, 2013
The premium SMS market value is
gradually decreasing while facing
growing pressure from mobile apps.
Two major forces are causing the
shift; users have smartphones and are
choosing more versatile application
services. At the same time service
providers prefer to invest in mobile
applications, sometimes even at the
expense of currently lucrative SMS
services. Moreover, the mobile operators have adopted tighter policies
in accepting current and new services
and cleaned the SMS market from
unwanted services. All these factors
together have caused a sharp drop in
total market revenue.
30
2008
2009
2010
2011
2012
2013
2014
2015
2016
The only growth areas left in SMS services are public
transport and vehicle registry inquiries; all of the other categories are facing decreasing demand. Some of the service
categories have disappeared of which some have been
replaced by corresponding mobile applications. Ringtones,
which once were the king of premium mobile services,
have melted away almost entirely as a business. Directory
services in turn, are shifting to mobile apps and a different
business model. SMS loans are no longer available due to
new legislation. At the same time hardly any new premium
SMS services have been developed.
The SMS market is dominated by a few large players and
followed by dozens of other service providers. Operators’
role is mainly in the delivery and billing services, less in service provision. Fonecta continued as the largest service provider by revenue in 2012, followed by HSL. Together these
two players represented close to a half of the total market
revenue. Most of the remaining revenue is going through
aggregators that host a number of service providers.
2008
2009
2010
2011
2012
2013
2014
2015
2016
Others
22,4
22,7
26,7
30,4
25,5
Ringtones
8,3
7,1
4,6
3,5
2,1
21,5
18
15,1
12,7
0,9
0,3
0,1
Chat & communities
5,0
3,1
2,5
2,2
0,0
2,0
1,8
1,3
0,8
Weather
2,0
2,0
2,1
0,4
2,1
2,0
1,5
1,4
1,2
Classifieds
2,6
3,3
1,1
3,3
3,0
2,1
1,9
1,7
1,5
Interactive TV services
2,7
1,4
2,7
2,4
2,2
0,7
0,8
0,8
0,7
Vehicle registry inquiries
0,6
3,5
3,7
3,8
3,8
4,1
4,2
4,2
4,3
4,3
Public transportation
6,4
6,7
6,9
6,9
7,3
7,6
8,0
8,4
8,8
Directory services
16,5
17,9
17,2
16,3
16,8
15,0
10,5
7,3
5,1
69
69
70
70
63
55
46
39
34
Source: Idean, 2013
Figure 14.
Premium SMS revenue in Finland by major
service category, 2008–2016 (M€)
Almost all the SMS service areas are facing decreasing revenue trend. The only exceptions
are public transportation services and vehicle registry inquiries that have been resistant for
the trend and will stand out as the leading SMS services in 2016.
31
PREMIUM RATE CALLS
177
172
172
172
0 %
0 %
Other
-3 %
Entertainment
Adult entertainment
Interactive TV services
Mobile payments
143
Customer care
124
107
Figure 15.
Premium rate call revenue in Finland
Taxi
89
2008–2016 (M€)
Premium rate call market revenue is
82
-9 %
gradually declining after a 15 years of
strong performance. The development
resembles premium SMS market
-13 %
development. The developer interest on
both of these platforms has dramatically
-14 %
decreased. The current smartphone
Directory services
-16 %
-17 %
application platforms and browsers have
replaced the need of these traditional
platforms.
Source: Idean, 2013
The premium rate call revenue
dropped 17 % in 2012 to 143 million
euros. Still, the premium rate call
revenue represents over half of the
total domestic revenue in Finland.
The market is forecast to decrease
steadily in the coming years. Most
notably the demand for the two
leading service categories, directory
services and taxi orders is decreasing. The directory services due to
shift in business models and migration to other channels. The shrinking
taxi service revenue is mainly due
to slowing demand for taxi services
in general followed by the current
economic recession.
32
2008
2009
2010
2011
2012
2013
2014
2015
2016
The market for premium rate calls has a long and successful
history, which has been unfairly overshadowed by the more
hyped markets, such as SMS based and mobile application market. Premium rate calls is currently and is forecast
to remain the leading mobile content service category
throughout the forecast period in this report. The total
market revenue is highly dependent on the success of two
leading services, directory services and taxi orders. Their
revenue is forecast to decline in the coming years and the
total market revenue trend will follow.
The market consists of a large variety of services. In addition to directory services to taxi orders there are for example TV show voting, horoscopes and mobile payments for
soft drink and snack vending machines. The two leading
services represented together almost three quarters of the
total revenue in 2012. All of the premium rate call service
categories are expected to face decreasing demand in the
coming years.
2008
2009
2010
2011
2012
2013
2014
2015
2016
Other
12,5
11,8
11,2
10,7
10,1
9,6
9,2
8,7
8,3
Entertainment
6,0
6,0
5,5
5,1
4,7
4,0
3,4
2,9
2,4
Adult entertainment
6,0
6,0
5,9
5,3
4,8
4,3
3,9
3,5
3.1
Interactive TV services
4,7
4,7
5,1
5,5
3,3
3,6
3,1
2,6
2,2
Mobile payments
6,4
6,4
6,6
7,9
7,7
7,4
7,2
7,0
6,8
Customer care
9,0
9,0
9,4
9,2
9,3
9,4
9,3
9,2
9,1
Taxi
31,5
28,9
30,3
31,3
27,2
25,0
24,0
23,1
22,1
Directory services
100,8
98,8
97,8
96,9
75,5
60,4
46,5
32,6
27,7
177
172
172
172
143
124
107
89
82
Source: Idean, 2013
Figure 16.
Premium rate call service revenue in
Finland by category 2008–2016 (M€)
All of the premium call rate service categories are facing declining demand. The dropping
use of directory and taxi services is particularly influential for the total market value. Mobile
payments and customer care service categories are least affected by the current trend.
33
Device base
The mobile device user base is rapidly
changing in Finland. The majority of
mobile phone users have a smartphone,
and a tablet device was in every fourth
household in Finland in the fall of 2013.
This trend is projected to continue as
smartphones and tablets dominate
the sales charts. In 2013 there will be
three smartphones sold per one feature
phone and it seems likely that soon the
smartphones will be the only option
available in stores. Tablet devices exceeded laptop unit sales in the first half
Figure 17.
of 2013 in Finland. At the same time
there are several new device categories emerging, such as smartwatches,
different wristbands, glasses and other
wearable computing devices.
platform 2010–2016 (in thousands)
Smartphones will outnumber feature phones
Installed base of tablets is growing fast and it
in 2013. Windows Phone is forecast to be
is forecast to double in 2013. Apple has been
the fastest growing platform in Finland in
unchallenged leader in the market so far.
S40
2013; the device base is estimated to double
Now the competitors are challenging Apple’s
in 2013 against previous year. S40 is the
market share. Competitors challenge Apple
leading platform overall and Android among
especially in the lower price categories where
smartphones. In 2016 Android is forecast
Apple has no supply.
to represent approximately half of the total
Symbian
mobile phone population in Finland.
Source: Idean, 2013
Source: Idean, 2013
iPhone
Windows Phone
Android
Others
Nokia OS
S40
Symbian
iPhone
Windows Phone
Android
34
By the end of 2013 Android is forecast
to be the leading platform when looking at the combined device population
of smartphones and tablets in Finland
excluding the Symbian platform.
Android is forecast to take 44 % of the
market share, followed by iOS with
32 % and Windows with the remaining
24 %. iOS remains as the most lucrative
platform for application developers
despite the fact that it is not the leading platform by the number of devices.
There are several explanations for this.
Practically all iOS device users have
downloaded their credit card information into the devices, unlike users on
other platforms. Moreover, iOS devices
are higher priced than devices on other
platforms on average and presumably
the users are also wealthier than users
on other platforms. These are among
the factors that make iOS superior in
commercializing its application store.
Tablet device population in Finland by
Nokia OS
platform 2010–2016 (in thousands)
population is forecast to climb to close to
900 000 tablets at the end of 2013.
Figure 18.
Others
Mobile phone population in Finland by
The mobile device user base has a
strong influence on mobile content service uptake and development. Currently
the most interesting and significant data
is the device population of smartphones
and tablets and their market shares by
platform. The total installed base of
smartphones in Finland is forecast to
grow to four million devices by the end
of 2013 and to represent 59 % of the
total of seven million mobile devices in
Finland. Tablet device sales has continued strongly in 2013 and the total device
2010
2011
2012
2013
2014
2015
2016
865
622
693
647
422
446
365
12,4 %
8,9 %
9,9 %
9,2 %
6 %
6,4 %
5,2 %
875
680
420
315
158
71
32
12,5 %
9,7 %
6 %
4,5 %
2,3 %
1 %
0,5 %
3 270
3 100
2 590
1 943
1 360
884
574
1
13
84
258
464
720
914
46,7 %
44,3 %
37 %
27,8 %
19,4 %
12,6 %
8,2 %
8 %
8,9 %
19,6 %
29,2 %
37,5 %
49,5 %
58,2 %
13
143
429
885
1 237
1 453
1 570
1 820
1 800
1 470
1 029
720
360
180
26 %
25,7 %
21 %
14,7 %
10,3 %
5,1 %
2,6 %
94
282
497
646
775
930
977
1,3 %
4 %
7,1 %
9,2 %
11,1 %
13,3 %
14 %
17
55
455
933
1 259
1 196
1 136
0,2 %
0,8 %
6,5 %
13,3 %
18 %
17,1 %
16,2 %
61
462
875
1 488
2 306
3 113
3 735
0,9 %
6,6 %
12,5 %
21,3 %
32,9 %
44,5 %
53,4 %
2010
Others
iPad
Android Tablet
–
2011
2012
–
–
2013
2014
2015
2016
10
41
81
119
1,1 %
3,3 %
5,5 %
7,6 %
12
130
345
617
732
653
537
92 %
91,1 %
80,4 %
69,7 %
59,2 %
45 %
34,2 %
35
DEVICE BASE
1 883 063
Feature Phones
1 557 181
The new emerging device categories, such as smartwatches, different wristbands, glasses and other wearable
computing devices provide an interesting opportunity
for service providers. There are already some products
available in these categories, but they have not made a
breakthrough yet. Opinions regarding the future commercial success of these categories is divided,: there are
many believers and many who are skeptical. So far there
have been no commercial breakthroughs for smartwatches
although several models have been available in stores for
some time. Google has been developing Google Glass
concept.
The handset population in Finland is very fragmented;
there were hundreds of different handset models identified in Finnish mobile networks in 2012. The fragmentation of the mobile device population was increasing until
2008, but has stabilized since then. Yet when compared
internationally the Finnish handset base is solid due to
Nokia’s strong market share – even though Nokia’s market
share has dropped somewhat over the past years. Some
70 % of the active handsets on Finnish mobile networks
were Nokias in the fall of 2012. The top 10 handset models
represented approximately 25 % of the total handset base.
629 394
581 582
Smartphones
434 458
404 714
337 146
Laptops
Desktop computers
80 972
2008
2009
36
2010
2011
2012
Tablets
15 %
27 %
43 %
45 %
64 %
68 %
H2
2010
55 %
H1
23 %
99 %
95 %
85 %
H2
2011
36 %
32 %
H1
H2
2012
56 %
77 %
63 %
44 %
46 %
73 %
73 %
57 %
2013
37 %
56 %
Laptops
Feature
phones
H1
Smartphone penetration grew in all of the studied countries
between 2011 and 2013. According to the same source,
the differences between most of the countries in Q1 2011
were rather marginal. Smartphone penetration was around
30% in most of the benchmarked Western European countries in 2011. The change within the following 24 months
suggests to tremendously strong smartphone sales and
migration in some these countries in 2011 and 2012.
Tablets
Smartphones
Rapidly changing device population
Smartphones and tablet devices are currently making their
way to the masses. Over half of the Finnish mobile phone
population consisted of smartphones in mid 2013 and
three out of four mobile phones sold in the first half of
2013 were smartphones. Lately the leading mobile phone
operators have indicated that smartphones represent over
two thirds of their total mobile phone sales.
62 861
11 731
54 %
44 %
27 %
H1
2013
H1
H2
2010
H1
H2
2011
H1
H2
2012
H1
2013
Sources: Kotek; Idean, 2013
Figure 19.
Annual device sales in Finland 2008–2013
(units), and bi-annual distribution of sales
between selected devices 2010–2013
Smartphone sales exceeded feature phones in 2010 and tablets laptops in 2013. It seems
likely that soon smartphones will be the only option available in stores. Tablet has become
the choice for both consumer and business users. So far tablets and laptops have been used
in tandem, but in many cases tablets may replace the need for a laptop in the coming years.
37
SMARTPHONE PENETRATION
EU5
Android
50 %
iOS
57 %
Blackberry OS
Spain
Sweden
United Kingdom
Denmark
United States
56 %
33 %
Spain
44 %
33 %
China
Android
26 %
29 %
iOS
47 %
France
15 %
27 %
Symbian
Blackberry OS
24 %
Russia
14 %
1 %
Hungary
22 %
Belgium
22 %
Japan
6 %
Sources: Comscore; Idean, 2013
Figure 20.
Smartphone penetration in EU5 and
Finland in 2012
Finland lags behind in smartphone penetration in couple of ways. First, the overall
penetration of smartphones is smaller in Finland than in for example combined average of
EU5. Secondly, the structure of the smartphone base is less optimal for the new services as
there is still a considerable amount of Symbian phones in the market.
38
20 %
41 %
40 %
34 %
34 %
26 %
14 %
42 %
36 %
19 %
Brazil
38 %
29 %
18 %
47 %
38 %
28 %
Germany
0 %
Windows Phone
Other
Italy
44 %
47 %
33 %
Finland
55 %
48 %
36 %
21 %
Finland
56 %
44 %
31 %
Austria
59 %
45 %
30 %
Canada
62 %
51 %
30 %
UK
63 %
51 %
30 %
3 %
65 %
52 %
37 %
5 %
Other
Italy
Australia
7 %
68 %
54 %
33 %
15 %
Windows Phone
France Germany
Norway
20 %
Symbian
73 %
Korea
Jan 2013
Jan 2012
Jan 2011
25 %
Sources: Google; Idean, 2013
Figure 21.
Smartphone penetration in selected
countries Jan 2011 — Jan 2013
Finland is used to top many IT-related global benchmarks. However, in smartphone
penetration Finland doesn’t perform better than the average. This maybe due to Nokia’s
strong position in Finland combined with the stumbling smartphone strategy over the past
years.
39
MOBILE MARKETING
36
33
28
21
Figure 22.
36 %
Mobile marketing revenue in Finland
2008–2016 (M€)
13
Mobile marketing is growing in a healthy
speed. One could say, that the promises
are finally redeemed. A considerable share
36 %
15
11
9
of overall online consumption has moved to
11 %
21 %
16 %
mobile devices and the share of mobile is
14
18 %
10 %
5 %
expected to increase further in the forecast
Customer communication
period.
Source: Idean, 2013
Mobile marketing is growing steadily.
In 2012 the total marketing spend
was close to 16 million euros, which
represents a 21 % increase over the
previous year. SMS based forms of
mobile marketing brought in the
majority of the revenue in 2012, but
combined spending on display and
search marketing are forecast to
exceed SMS based forms in 2013.
The total mobile marketing spending
is forecast to reach 23 million euros
in 2013, which is well above earlier
expectations. Customer relationship
communications is the largest category within mobile marketing. Currently
its share is over 60 % and in 2015 it is
still forecast to represent over 40 % of
total mobile marketing spending.
40
2008
2009
2010
2011
2012
2013
2014
2015
2008
2009
2010
2011
2012
2013
2014
2015
2016
Customer communication
6,9
7,6
8,5
8,9
9,2
9,6
10,1
9,8
9,5
Messaging
1,8
2,1
2,4
1,9
1,0
0,4
0,2
0,1
0,0
Display
0,1
0,2
0,5
0,8
2,8
6,3
12,3
19,0
25,7
2016
In this report, mobile marketing has been divided into
mobile advertising and customer relationship communication. Mobile advertising consists mainly of SMS based
advertisement messaging, mobile banners, mobile search
and in-app advertising. Other forms of mobile advertising
are estimated to have low significance today and are thus
excluded from the scope. These forms include mobile marketing via MMS, Bluetooth, infrared and marketing within
games, and video clips. Also QR Codes are excluded.
Display and search marketing spend are driving the fast
growth in mobile marketing. The major driver behind these
is the growing mobile consumption and development of
more sophisticated mobile marketing methods and tools.
In recent years both desktop and mobile usage have been
growing simultaneously. In coming years mobile usage will
increase at the expense of desktop usage. A growing part
of the ad spend in Finland goes through international players, such as Google and Facebook.
Messaging
Display
Search
Search
0,4
9,3
0,8
10,8
1,7
13,0
2,1
13,7
3,7
16,6
6,8
23,1
12,6
35,2
19,5
48,4
26,7
61,9
Source: Idean, 2013
Figure 23.
Mobile marketing revenue in Finland by
category 2008–2016 (M€)
Display and search are the fastest growing mobile marketing categories throughout the
forecast period. Customer relationship communication remains as a significant category as
well.
41
Interviews
Steering Group
Henrik Laine – Vice President at MTV Oy
Christian Lindholm – Start-Up (Koru) in residence at EIT
ICT Labs
Ilkka Lehto – Lakiasiainpäällikkö, Teleforum ry.
Jan Ketonen – Advisor & Innovator, Mobile Advertising at
Sanoma Finland
Jari Hyvönen – Product Manager, Elisa Oyj
Jouni Hytönen – tuottaja, Fonecta Oy
Henry Nieminen – Vice President, Enterprise Markets
Finland, CGI
Viitasaari Jukka – Director, Information Technology
Industries, The Federation of Finnish Technology
Industries
Ville Peltola – Innovation Director, IBM Finland. CTO
Office Europe
Inka Vilpola – General Manager, IM Technology Office,
Wärtsilä
Ismo Kosonen – Senior Adviser, Ministry of Transport and
Communications
Juhani Kivikangas – Toimitusjohtaja, Teleforum ry.
Janne Aaltonen – CEO, HYKSin
Juho Huopaniemi – Director, Elisa Oyj
Jukka Sintonen – CEO, Booxmedia Oy
KooPee Hiltunen – Director, Neogames Finland
Kari Systa – Professor, Software Engineering at Tampere
University of Technology
Mika Okkola – Director, Developer and Platform
Evangelism | Microsoft Oy
Miko Stratos – Director Service Development, Fonecta Oy
42
Pasi Eronen – VAS Offering Manager
Mikael Stendahl – Head of Partner & Developer Relations
at Nokia, North Europe
Riku Salminen – CEO, Jongla
TeliaSonera Finland Oyj
Mikko Terho – CTO Mobile Software, Site Manager,
Huawei Technologies Oy (Finland) Co.Ltd
Tero Kalsta – Johtaja, Avainasiakkaat, Steam
Communications Oy
Pekka Sivonen – Head of App Campus, Aalto University
ACE
Timo Ketonen – Project Manager at EDGE research group,
Åbo Akademi University
Peter Klenberg – Director, ICT and Business Development
at Tuko Logistics Oy
Tommi Kankare – Liiketoiminnan kehityspäällikkö, Fonecta Oy
Tiina Zilliacus – Founder and CEO at Gajatri Studios Oy
Vesa Kurki – Director, FMI
43