UK leads apps development in Europe with revenue forecast at £4B in 2014

The UK is leading mobile apps development in Europe and is set to generate revenue of more than £4 billion (€5 billion/$6.8 billion) in 2014, according to a new study commissioned by Google.

The study, carried out by VisionMobile, said the UK app industry was worth £2.9 billion in 2013 and is set to reach £5.5 billion in 2015, with compound annual growth rate of 38 per cent forecast for between 2013 and 2015 and 22 per cent for between 2013 and 2025.

"By 2020 we forecast that the UK app economy will reach £15 billion and will exceed £30 billion by 2025," the report added.

This compares to the global app economy, which the study said was worth over £40 billion in 2013 and is growing at approximately 27 per cent each year.

The UK figures include sales of apps and app-related services that are developed in the UK and sold either locally or globally, yet exclude e-commerce revenues from sales of non-digital goods via mobile apps (such as via Amazon, eBay or mobile websites).

UK-based mobile commerce sales in December 2013 alone exceeded £3 billion according to the Interactive Media in Retail Group (IMRG), making it a far larger market than the mobile app market. VisionMobile said it expects "the increased adoption of mobile apps by retailers and evolving business models in mobile retail like affiliate sales and mobile-social-local marketing will allow app companies to capture a sizeable share of this growing market within the next five years."

Meanwhile Europe is being led by the UK in terms of total app revenues and experienced app developers, the study shows. Several metrics indicate that the UK is the biggest tech hub in Europe and "most likely the second most important tech hub after the U.S.", according to the report.

In 2013 the UK was responsible for more than one third of the total app revenues generated in the EU28 and slightly less than a fifth of all app developers in the EU28. Average revenues of UK app developers are approximately 75 per cent higher than those of developers across EU28.

The UK app economy is also more export-oriented than others: UK developers generate far more money from high growth markets outside Europe than other European developers.

The report estimates that 48 per cent of UK developers generate most of their revenues outside of European markets. In contrast, just 11 per cent of developers in France generate most of their revenues outside of Europe, while for Germany this figure is 38 per cent.

One reason for this is the widespread use of the English language. "It could also be an indication that UK app developers are more mature in terms of their business and marketing focus, two essential ingredients in a creating a successful app," VisionMobile added.

Today, the UK has around 8,000 companies directly involved in app development and some 380,000 jobs involved in the app economy.

"We expect that approximately 30,000 new jobs will be created in the next 12 months," VisionMobile said.

For more:
- see the VisionMobile report

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