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Market

Market

F-Secure operates in the large and growing consumer security market with a wide range of cyber security and privacy products and services. These include, e.g., products and solutions for endpoint protection, privacy VPN, identity, personal data and password protection, connected home security, and network security.

The growth of the target market is boosted by consumers' increased understanding of network threats and increased willingness to pay for cyber security solutions. In 2020, consumers were estimated to spend USD 5.7 billion globally on cyber security, and its euro-denominated average annual growth rate (CAGR) is expected to be 4% in 2020-2025.

F-Secure's consumer security products are sold either directly to customers or through a network of some 170 channel partners. F-Secure operates globally, but a majority of revenue is generated in Europe.

Geographical distribution of revenue 2021

EUR million

IFRS (unaudited)

1 Jan – 31 Mar

2022 2021
Europe excl. Nordic countries 12.4 12.6
Nordic countries 9.6 9.1
North America 4.0 3.4
Rest of world 1.4 1.2
Total 27.4 26.3

Geographical distribution of revenue 1–3/2022*

*The financial information presented in the table have been prepared on a carve-out basis from WithSecure’s consolidated financial statements using the historical book values for income and expenses, assets and liabilities and cash flows attributable to the consumer security business.

Market trends and drivers

Increasing digitalization affects consumer behavior

With the COVID-19 pandemic, there are more users of different online services than ever before. In 2018, in total 37% of consumers reported making monthly online purchases with their mobile devices and in 2021, the share was already 60%. In addition, mobile banking has increased from 41% to 66% between 2018 and 2021. Most of these new digital skills and online operations have become commonplace and an increasing portion of consumers’ daily life is spent online whether momentarily or hours of browsing, online gaming, streaming, or on hybrid work.

Cyber security concerns have increased

We expect that consumers' willingness to pay for cyber security is increasing. According to market surveys consumers’ willingness to pay increased by 17% in 2021 compared to 2018.

Surveys also show that consumers, regardless of customer segment, are willing to pay on average EUR 7-10 per month for a comprehensive all-in-one cyber security solution and EUR 3-4 per month for stand-alone products.

Cyber security concerns have increased

55% of consumers worry about someone stealing their identity for online purchases, taking over their accounts or even taking out loans in their name. Increased online shopping has also resulted in 55% of consumers feeling worried about online shopping fraud. At the same time, 54% worry about malware leading to loss of personal data.

Similarly, the number of IoT devices in use is expected to reach 42 billion by 2025 and they may be vulnerable to cyber-attacks. Consequently, consumers view cyber security as the third most important factor when choosing a home gateway or Wi-Fi router.

Cyber security remains complex for consumers

Customers are finding it increasingly difficult to stay sufficiently protected in the modern world. The vast number of concerns and threats, and related complexity leaves even the more tech-savvy consumers overwhelmed. For example, 72% of tech-savvy consumers feel that managing the security of all their connected devices is almost impossible.

As cyber security is closely linked to broadband connectivity, 64% of consumers are willing to buy cyber security and privacy services from their telecom service provider.

Strategy

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Business model

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