The extent to which the iPhone may have single-handedly saved the mobile video industry has been demonstrated by research finding that 64% of users of the Apple smartphone access video applications.

Furthermore, despite the huge competition that Apple has faced in the smartphone arena from rival products based on the Android operating system, the data from Futuresource consulting showed that the iPhone was trouncing Android and all other in the video stakes with only 32% of all other smartphone users watching video on their devices.

In the 'Living With Digital' consumer survey, carried out twice a year, Futuresource found that a quarter of people in the UK and a third in the US now own a smartphone and this growth is set to continue. It predicts that three-quarters of those in both territories will own a smartphone by 2014. Not surprisingly the greatest adoption of iPhone, HTC and Blackberry phones is by the younger consumer, with the higher percentage of owners being under 25.

The devices are being used to access a wide range of entertainment content. YouTube is beaten only by Facebook and Google in all territories where it is accessed by 44% of smartphone owners using mobile internet. Yet in a glowing example and tribute to its recent mobile expansion strategy, the BBC is number three in the UK.

Such uptake is driving a commensurate surge in app downloads with a quarter of huge surge in app uptake with a quarter of smartphone owners surveyed in the UK and US downloading apps to their phones. App development is influenced mainly on what consumers are willing to pay for when accessing content on smartphones and mobile devices. Futuresource identifies in-app purchasing as a prevalent area of income for the apps market, and is regarded as a potential contributor of considerable revenue.

Apple iPhone users are most frequently paying for content, with one in three users making 'in-app' purchases compared to other smartphone users, one in ten Blackberry and Android users are also making 'in-app' purchases.

Outlining where the significant opportunities would be, Alison Casey, Head of Global Content at Futuresource Consulting, said: "Apps for smartphones and tablets continue to offer significant opportunities for promoting and monetising games, books, movie and TV content. Although the market is in its early stages, tablets will become the portable device for entertainment in the future, generating a new breed of applications and services that will breath additional life into this already lucrative market segment."

Casey also cautioned that moving forward the industry needed to be aware of the considerable percentage of phone owners - particularly in the UK - that are still using pay-as-you-go services. The analystís research showed clearly that users on contract tariffs were far more likely to pay for content and downloads and Casey added that strategies need to be in place to transition consumers towards a contract mentality.