Annual revenue from mobile content purchased on smartphones and tablets is expected to increase from $40 billion this year to $65 billion by 2016. This growth will spring from expanded consumer interest in content available on tablets.
Games, Videos and Electronic Books Will Drive Purchases on Tablets
A Juniper whitepaper reveals that 65 percent of North Americans currently use their tablets for “mobile entertainment,” meaning tablets are used to watch videos, play games and read e-books, among other activities. E-book apps currently generate the highest amount of revenue for tablets, but all tablet entertainment will see higher usage in the near future.
Larger tablet screens are inherently more suited to games, video and e-books than smaller smartphone displays, which explains why revenue from tablet content will increase more than revenue from smartphones. For example, the report finds that consumers are using their tablets instead of dedicated portable gaming devices such as the Sony PS Vita and the Nintendo 3DS.
Direct Carrier Billing Will Rise on Smartphones
One anticipated source of increased mobile revenue on smartphones is direct carrier billing (DCB). Consumers using DCB can purchase items from a mobile device without linking to a bank account or credit card; charges are generated directly through individual mobile providers. Examples of programs using DCB include Google Play and Blackberry App World.
“While the availability of direct carrier billing is patchy, the various benefits which the mechanism offers — higher conversion rates, opportunities to monetize unbanked customers — suggest that deployments will rise significantly in the medium term,” explains report author Windsor Holden.
Revenue Drivers Will Differ Between Tablets and Smartphones
Much of the difference in revenue streams between tablets and smartphones will relate to the growing disparity in how each type of device is used. While smartphones understandably are living up to their mobile classifications, tablets are generally more prevalent in consumers’ homes as they replace laptops.
Smartphones are increasingly used for quick information searches on the go, while tablets are being used more for in-depth research and entertainment purposes. This trend explains why e-book apps currently provide the highest percentage of mobile content revenue for tablets and why gaming and video will continue to drive up that revenue.
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