Mobile Application Development market in the UK to reach USD 36.93 billion by 2025

The Mobile Application Development Market in the UK was valued at USD 15.16 billion in 2019 and is estimated to reach USD 17.58 billion by the year 2020.

It is expected to grow at the CAGR of 16.17% within the time horizon of 2020-2025 because of the increasing smartphone penetration, increasing frequency of use of the application and growing e-commerce industry.

Its market value will reach USD 36.93 billion by the year 2025.

Definition / Scope
Market Overview
Market Risks
Top Market Opportunities
Market Trends
Industry Challenges
Technology Trends
Pricing Trends
Regulatory Trends
Market Size and Forecast
Market Outlook
Technology Roadmap
Distribution Chain Analysis
Competitive Factors
Key Market Players
Strategic Conclusion
References
Appendix

Definition / Scope

The mobile application is the application software that is operated on mobile devices through IOS, android, and other platforms. In the context of the United Kingdom, most of the popular mobile applications are Facebook, Instagram, Gmail, WhatsApp, Chrome, Facebook Messenger, YouTube, Twitter, Google maps, Snapchat, Apple Music, and Amazon.

The application development is focused on creating, writing, designing, coding, and testing the software and mobile applications for smartphones, tablets, and other mobile devices. The mobile-based application market is focused on the development of the software in the sector of entertainment, health & fitness, travel & hospitality, e-commerce, education, and others.

Based on the system of the payment, the mobile application development market is segmented into two categories i.e. payable and non-payable application.

As the use of the platform for the development of the mobile application is considered, its market consists of three categories i.e. iOS payment, android payment, and others.

Market Overview

The United Kingdom is considered to be the world’s second most important technological hub and the powerhouse of the mobile-based application development in the world.

Almost one-fifth of all European application development agencies are located in this country and about 31% of those agencies are located in London only.

There are almost 8000 application development agencies in the UK and about 7% of the top applications of the United Kingdom are from the British application publishers.

Here, almost 27% of the top news applications, 20% of the top travel application, 33% of the top shopping application, and 40% of the top lifestyle application are from the British application publishers.

The total market size of the mobile application development market in the UK is valued at USD 15.16 billion in 2019 and is expected to reach USD 17.58 billion by the year 2020. Its market value is expected to grow at the CAGR of 16.17% with the forecasted period of 2020-2025.

Its market value will reach USD 36.93 billion by the end of the year 2025. Based on the type of platform, the iOS segment is leading the market with a market share of almost 52% of the total mobile application development market in the UK.

The market size of this segment is valued at USD 7.88 billion in 2019. As the type of payment system is considered, the non-payable application segment is leading the market with a market share of almost 89% of the total mobile application development market in the UK. The market size of this segment is valued at USD 13.49 billion in 2019.

Increasing penetration in smartphones, increasing frequency of use of the mobile phone-based application, and growing e-commerce market are the factors driving the growth and development of the mobile application market in the UK.

However, the high cost of application development and issues recruitment of technical expertise might restrain the growth and development of the mobile application development market in the UK.

The key market players engaged in the mobile application development market in the UK are Auxano Global Services, The Distance, 3 Sided Cube, Fueled, Brightech, Waracle, and Glance.

Market Risks

Issues of advertisement in the applications

The mobile-based application mostly offers advertisement in the context of the free download and installation. Because of this, the number of devices with ad blockers has been increased from 142 million in 2018 to 615 million in 2019 globally.

In the UK, almost 24% of the application developed by British publishers include advertisements in apps. Along with this, the trend of the hacker attack towards the small business with a minimum security system is also increasing. Every 39 seconds, a hacker attack occurs, and 43% of the target small businesses.

It has been estimated that almost 73% of the consumer dislike pop-up ads and about 81% of them close the browser and exist the webpages.

Increasing use of the ads blocker and user dislike towards pop up adds might influence in the downloading and use of ads containing the application, which will ultimately restrain the growth and development of the mobile application development market in the UK.

Top Market Opportunities

Increasing smartphone penetration

In the context of the UK, the number of smartphone users is in increasing trend. The number of smartphone users has been increased from 56.68 million in 2018 to 57.79 million in 2019. This number is estimated to reach USD 61.06 million by the end of the year 2024.

Smartphone penetration has been increased from 52% to 85% within five years. Along with this, it has also eclipsed laptop penetration as laptop penetration has just increased from 73% to 78% within the five years.

This increasing level of smartphone penetration is creating a favorable environment for the growth and development of the mobile application development market in the UK.

Growth in investment for digitalization

The investment of the governmental authorities and other non-governmental business entities in digital technologies is growing rapidly in the context of the UK. In the year 2019, digital technology grew almost six times faster in comparison to the growth of the other industries.

The UK investment in the new technology sector is about USD 13.2 billion in 2019, which is almost USD 3.78 billion higher in comparison to the year 2018. Here, investment in digital technology has been increased from 80% in 2018 to 81.2% in 2019. The investment in technologies of the UK is placed at the fourth position globally.

The investment of UK based digital technologies accounts for almost one-third of the investment of the technology companies in Europe. almost 25% of all the European highest investment cities in technologies are located in the UK.

The increasing level of investment in digitalization and financial technologies will create a favorable environment for the growth and development of the mobile-based application market in the UK.

Market Trends

Rising e-commerce industry

The market size of the e-commerce market in the UK is increasing and is expected to grow at the CAGR of 4.9% within the forecasted period of 2020-2025.

The market size of the e-commerce market in the UK is estimated to value at USD 92.84 billion in 2020 and its market value is forecasted to reach USD 112.5 billion by the end of the year 2024.

The business to consumer e-commerce market of the UK is the third-largest in the world. The user penetration in online retail sales is about 84.2% in 2020 and is expected to reach 88.4% by the year 2024.

Along with this, the share of the consumers purchasing products online is about 82% and this purchase contributes to almost 33% of the total online sales of all the EU countries in 2019.

It has been estimated that almost 86% of internet users make at least one online purchase in the year 2019. This increasing level of penetration in the e-commerce and online sales are driving the market for the growth and development of the mobile-based application related to financial and business activities.

Increasing time spending in the application’s use

The frequency of the use of applications is increasing over time in the United Kingdom. On average, mobile phone users spend almost 90% of their time in the application. Since 2013, almost the time spending on the population in mobile applications has been increased by more than 90%.

The average screen time of the public is about 3 hours and 23 minutes a day and About 36% of smartphone users use mobile phones more than 61 minutes a day. On average, the UK’s public spends almost 24 hours a week online, which is almost twice over a decade. Along with this, the smartphone users access their favorite applications almost 12 times per day.

On average, the application developed by the British publishers has almost 151.5 thousand downloads, which is high in comparison to the average downloads per application for other global publishers. Almost 250 million applications are downloaded monthly. It is driving the market for the growth and development of the mobile application development market in the UK.

High cost and time involved in the application development

The cost required for the development of the mobile-based application depends upon the complexity of the application. The general cost required for the development of a simple mobile-based application ranges from USD 20,000 to USD 40,000 while the cost required for the development of a complex application ranges from USD 75,000 to USD 150,000.

Along with this, almost 80% of the mobile applications require more than three months for development and 40% of it requires more than six months for development.

The high amount of the cost and time involved in the development of the mobile-based application might restrain the growth and development of the mobile-based application market in the UK.

Industry Challenges

Recruitment of technical expertise in application development

In the context of the United Kingdom, there are more than 274,000 programmers and software developers. The recruitment and retention of this technical expertise is a burning issue for the application development agencies.

For instance, in a survey conducted among the software developers by the stack overflow, almost 37.1% of the study participants reported the flexible working hours as the most important factor for the work and almost 51% of the developers reported that recruiting agencies and process is the most annoying thing about the employment. Along with this, about 36% of employers expect the struggle to recruit junior technology specialists.

Thus, it is quite challenging for the key market players to recruit and retain the software developers and employees in the mobile application development market.

Technology Trends

Advancement in science and technology is driving the potential for the growth of innovative solutions for application development. It is also widening the scope for the development of mobile-based applications as per the consumer needs. Some of the key technological trends in the mobile application development market are discussed as follows:

Virtual reality: This technology uses computer technology to create a virtual simulated environment and actively display the virtual content in the room-sized screens. It is embedded with the gaming, entertainment, and other application to enhance the user experience about the viewed content.

Artificial intelligence: This technology is allowing the market players for the use of the virtual personal assistants, intelligent chat application, and automation in the services delivery either for application development or its maintenance.

Internet of Things: It is enabling users with automated functions through the network of data analysis and artificial intelligence.

Instant applications: This application is gaining popularity and interest among smartphone users as the applications can be used properly without installing it.

Pricing Trends

The price of the products of this market depends upon the type of platform, number of platforms, design, number of pages, quality of the content, infrastructures, and features of the application. The price of mobile application development in the UK is quite high in comparison to the global price.

Globally, the price of the mobile application development is about USD 28,000 for iOS, USD 23,000 per android, and USD 18,000 for window phone. In the context of the UK, the cost of the app development for a single platform is USD 45,994 while the cost for the double platform is about USD 50,835.

More specifically, the median cost of the mobile application development in the UK is almost USD 70 per hour for iOS, USD 70 per hour for android, USD 50 per hour for X-platform, and USD 68 per hour for windows.

Regulatory Trends

Some of the key regulations directly or indirectly related to the mobile application development market are discussed as follows:

Public Sector Bodies Accessibility Regulations: The of the United Kingdom has drafted this regulation in 2018 to implement the European Union directive on web accessibility. It was developed to make the websites and mobile application of the public sector bodies more accessible, operable, and understandable.

The Data Protection Act: This regulation was developed by the government of the UK in 2018 to build up the strong legal protections for the sensitive and personal information of the organizations, business entities, and government.

The copyright computer program regulations: This regulation was developed in 1992 which is applied to all the works that are distributed on the internet through websites, blogs, and applications.

Market Size and Forecast

The total market size of the mobile application development market in the UK is valued at USD 15.16 billion in 2019 and is expected to reach USD 17.58 billion by the year 2020.

Its market value is expected to grow at the CAGR of 16.17% with the forecasted period of 2020-2025. Its market value will reach USD 36.93 billion by the end of the year 2025.

Based on the type of platform

The iOS segment is leading the market with a market share of almost 52% of the total mobile application development market in the UK. The market size of this segment is valued at USD 7.88 billion in 2019.
The android segment accounts for almost 24% of the total mobile application development market of the UK. The market size of this segment is valued at USD 3.63 billion in 2019.
The Windows phone segment accounts for almost 9% of the total mobile application development market of the UK. The market size of this segment is valued at USD 1.36 billion in 2019.

Based on the type of the payment system

The non-payable application segment is leading the market with a market share of almost 89% of the total mobile application development market in the UK. The market size of this segment is valued at USD 13.49 billion in 2019.
The payable application segment accounts for almost 11% of the total mobile application development market of the UK. The market size of this segment is valued at USD 1.66 billion in 2019.

Market Outlook

The Mobile application development market in the UK is expected to grow at the CAGR of 16.17% within the forecasted period of 2020-2025 because of increasing penetration in smartphones, increasing frequency of use of the mobile phone-based application, and growing e-commerce market.

Its market value will reach USD 36.93 billion by the end of the year 2025.

Technology Roadmap

Introduction of the innovative technological solutions such as virtual reality, artificial intelligence, instant application use is creating a favorable environment for the growth and development of the mobile application development market in the UK.

Along with this, rising e-commerce, and the online retailing market is also driving its market.

Distribution Chain Analysis

The process involved in the development of the mobile-based application consists of conceptualization & requirement gathering of information, infrastructure and design, mobile application development & testing, mobile application deployment, and upgrades & application support services.

The key stakeholders involved in the operation of this market are the mobile application development agencies, technical expertise involved in its development, and end-users.

Competitive Factors

The key market players engaged in the mobile application development market are competing for the introduction of the automatized application through the use of artificial intelligence, virtual chat boxes, and virtual reality.

Along with this, they are focused on the development of cost-efficient mobile-based applications.

Key Market Players

In the UK, there are almost 8000 application development agencies and about 7% of the top applications of the United Kingdom are from the British application publishers.

Almost one-fifth of all European application development agencies are located in this country and about 31% of those agencies are located in London only. Short profile of the key market players engaged in the UK based mobile application development market are discussed as follows:

3 Sided Cube: It is the digital development company engaged in the development of the mobile application for android, iOS, and cross-platform. It has developed more than 200 applications, websites, and software for non-profit, retail, and healthcare sector in more than 100 countries.

Fueled: It is the US-based application designing company providing the full-service mobile application development services and strategies. Its most popular project are afterlight, nimble, and are also chosen to make a Game of Thrones application.

The Distance: This company is developing a mobile-based application for the iOS and android platforms for advertising, business services, and healthcare sector.

Net sells: it is one of the leading digital agencies specialized in the development of the native and cross-platform mobile application development. It is providing the specialties services of web design, web development, and log design for more than 40 countries in the sector of broadcasting, jobs, finances, and fitness.

Dev Technosys: It is a certified web and mobile application development company providing the services of web design, application development for iPhone & apple, POS development, and IoT solutions for tourism, fashion, fitness, transportation, and health care sector.

Octal IT solution: It is the mobile application development company developing more than 3,200 web and mobile application development projects since 2004. It develops the mobile application for iOS, Android, mobile web, and Windows platforms.

Brightech: It is the award-winning mobile application development company with its office in Vantage Point New England Street. It develops the android, HTML5, and iOS platform based mobile application for pharmaceutical, financial services, travel lifestyle, retail & consumer, education, automotive, and energy utilities sector.

Strategic Conclusion

The Mobile application development market is growing at the rate of 16.17% because of increasing penetration in smartphones, increasing frequency of use of the mobile phone-based application, and growing e-commerce market.

However, the high cost of application development and issues recruitment of technical expertise might restrain the growth and development of the mobile application development market in the UK.

References

Appendix

UK= United Kingdom
EU= European Union
USD= United States Dollar
CAGR= Compound Annual Growth Rate