Android App Revenue Only 7% of iOS Revenue? Not So Fast

November 22, 2011

Up until last year Android revenue for app developers used to be pretty abysmal, and in some cases it was even 50 times smaller than iOS revenue. This was in part because of Apple’s huge lead with the iPhone in user base, when Android was still just in the growing period.

So I saw a report yesterday saying that Android apps get only 7% of the revenue of iOS, I immediately thought that’s an improvement, considering it’s just 15x smaller. However, I also thought it sounds a little too small considering how far Android has gotten, with 200 million devices versus Apple’s 250 million. Plus, I had a feeling he would compare the revenues the wrong way.

And it seems I was right. He only compared the “paid apps” revenues. I think everyone knows by now that most apps on Android are free and ad-based, not paid apps. So by default this was a flawed comparison. Some developers even make more money on Android by using ads and offering their apps for free, than they make on iOS by offering paid apps. And that is completely relevant to a new developer, but this chart would mislead him into thinking there’s no way of making as much money as on iOS. That is just wrong.

But it doesn’t stop here. Another way he’s doing it wrong is by comparing the total revenue Apple has paid to developers since 2007 to the total revenue Android has paid to developers since its inception.

Why would he even do that? What’s the point of that, other than to show Apple is somehow ahead? That stat is meaningless for developers deciding on which platform to build their app now. If Android would’ve been stagnant since 2008, and the ratio between Apple’s market share and Android’s market share would’ve been kept the same, then it would’ve made sense. But it’s far from that.

Last year Android went from 4% market share to 30%, and this year it has gone from 30% to around 55%. That’s about 2:1 ratio compared to Apple for new users, and almost 1:1 ratio for total user base, and because of the fast growth it’s going to surpass Apple in user base very soon, too.

So it really doesn’t make sense to compare the revenues both platforms got 2 years ago. What developers would want to know is how much money they could make right now on each, and how easy it would be to become popular on each of them. So a stat for say the last 3 months, would be a whole lot more relevant to them than a stat that shows how much money Android made when it barely even existed.

I know some people like to say that Android users only like free stuff, which could be true for some of the more tech oriented ones, but let’s not forget that the techies are quickly becoming a small percentage of all the people buying Android phones. Android phones are everywhere and almost at any price point. It’s bound to become used by just about anyone, including regular people who, just like a lot of iPhone users, would prefer the convenience of buying an app rather than trying to get it for free through other means.

The paid apps are more popular on iOS because Apple had their credit cards from day one, and it’s much easier to buy an app when your credit card is already stored in the account, rather than trying to buy an application, and getting prompted for your credit card information. Fortunately, I hear that Android 4.0 will ask you for your credit card information from day one (if you’re willing to give it of course) so that should make it a lot more easier for normal people to buy apps in the future.

At the rate Android is growing, there’s no doubt in my mind that it will become the most popular mobile platform in a couple of years, and that includes giving the most revenue to developers, too.

[Source: InsideMobileApps]

Comments

  • TechGuy-Tech

    Really good to see a writer refusing to accept a survey at face value and investigate the facts.

    Far too many survey results are published without knowing the size of the sample base, how the sample base was selected and the questions asked.

    If you carried out a survey asking “What is you favourite phone/tablet/OS” you would get wildly different results if the same survey was done an Android/Apple/Blackberry specific web sites.

    All surveys should be treated with great suspicion unless all the sample details and circumstances are revealed. The wording of questions also affect the answer as do the context in which the questions are asked. Preceding questions in a survey/poll can have a significant influence in subsequent responses.

    Excellent work Lucian – other web sites/writers should be as sceptical as you!

  • Kinchas

    Typical Apple bias FUD. With more and more major developers opting to release the Android version prior to the Apple version of their product….Android must be headed in the right direction.

  • AppleFUD

    Lucian,
    You should start a column called “Not So Fast!” to specifically go after all the FUD spread about Android. I see your comments on other sites trying to correct the FUD and having a specific page for the topic instead of constantly repeating yourself might be handy ;). Not to mention it would be a great place for others to link to.

    On the app revenue front. . . it’s all BS. It depends on what apps are in the market. RIM devs are getting paid more per dev than any other. Why? Probably because there are less apps and those devs are making quality apps on a platform that needs them–business apps.

    It would be similar to go out and say that Windows developers make less than Mac developers. Sure, but there are probably 100x more Windows developers and many on Windows are giving away free software where the Mac is a desert of software options so you have to pay ridiculous amounts for the most basic software that would be free on Windows. Not to mention there’s a clear market difference, etc. . . .

    It’s the apple FUD machine going about its business spreading FUD about their competition. They know the inevitable. If Android doesn’t put iOS in a niche MS will. It’s just a matter of time.

  • http://twitter.com/ohsillydaddy Jim

    I have an app on both markets. iOS is outselling Android over 50:1. Just my observation. I’m contemplating not supporting Android in 2012 as I’m not even covering my costs.

    • http://www.facebook.com/randy.khoo Randy Ashar Khoo

      I’m curious about your “apps” jim.
      do you mind posting your app links here, maybe we’ll do a review, and get more news out on your apps?

    • http://www.nerdshowandtell.com nerdshowandtell.com

      yeah, whats your app? lets see who your competition is on both platforms and if they are also paid, free, or ad revenue based.

    • conmeo concho

      yes. i would like to see your apps too. losers.

  • http://twitter.com/JessiDarko Jessica Darko

    Sorry, you don’t get to complain until you fandroids stop lying about the market share and stop claiming that Android is “winning”. You guys constantly ignore %66 of the iOS models and probably more than %66 of the devices by just talking about phones… hows android doing in the iPad market? That’s right, DOA. Yeah, yeah, I’m sure someone is working on an iPad killer that will be here real soon now just as soon as google can release a tablet version of android that doesn’t suck.

    Here’s the cluestick: Android is a rip-off of iOS that was rushed to market by a company that is incompetent at consumer software. It is crap, and you know it.

    So stop getting all high and mighty when your entire marketshare exists solely from tricking innocent phone buyers into thinking they’re getting a genuine iPhone!

    • Andrew

      Smartphone share (while not the only metric) can be a very useful one for developers targeting phone apps specifically (either using phone/text functionality or designing for the phone form factor as opposed to the tablet).

      If i was a little bit more childish, I could go ahead and say that you iTards (oh look! I can be cute with words too!) need to stop getting so butthurt about useless competitions like “winning”, when this article is clearly talking about developers using a specific metric for a business purpose. Other metrics are useful for other things, but “winning” is just idiotic. An example would be that iOS tablet market share is more than double android’s (and I assume the revenue share is at least as much), so that’s something a developer should take into account if he/she wants to develop a tablet app.

    • http://www.nerdshowandtell.com nerdshowandtell.com

      you apple fanboys now all fall back to the iPad now.. what are you going to do when the kindle fire and rest of the Android tablets take over that market too?

    • Matt Sabs

      iPad is stuck at $500, Android tabs can be anywhere from below $50 all the way up to over $700. There is something for everyone. iOS started out on top because they hit the market first. The same theory applies with the iPad. But as of now, of course the iPad has better sales.

    • jamespcole

      lol, spoken like a true fanboy. No facts, irrational and incorrect information. As for the “rip off of iOS” argument Android development was well under way 2 years before iOS development started(and the android dev was published) so the rip off actually goes in the other direction. iOS is ok but it is nowhere near the felxibility and ease of use of Android(and the iOS UI is horrible).

      Android has had many features long before iOS, such as multitasking, voice commands, wireless hotspots, tethering, background apps, scalable UI etc. I don’t think people are being “tricked” into buying Android phones, top end Android phones are better than iPhones by just about every conceivable metric so i consider people who purchase iPhones more followers of fashion than actually wanting good tech.

    • conmeo concho

      jessica darko. wow really dark name. does job send you from hell to earth?
      guess so. go back to hell please. it’s android world now. see android outselling ios.
      get the point? now back to hell.

    • http://profiles.google.com/eric.soulliage eric Soulliage

      Uber LOL , jsut look at the license agreement of you IOS and look at how much of it is actually open source , yes things you can get for free , that you paid for , the fact is that big parts of IOS is coming from BSD unix and linux , it’s flagrant when you open a command line on any apple product the genious of steve jobs was to take something that was free , put it in a pretty little bag and sell it to you brainless users ,my DesireHD is running 2Ghz what is your i* clockrate , barely below one ? not to mention that the 4s just got a 8MP camera that i’ve had in my pocket for what 18 months where is your LTE / HSPA+ support (what is such a fashionista still doing at a blue collar 3G speeds ?) ? where is your NFC ? , as i thought iphone 5 , now who is trailing who ?

    • Gareth Hunt

      I believe your being rather unfair to Android as a whole. The entire eco-system which is based on a plethora of different phones (for varying budgets) using the same OS is in stark contrast to its biggest rival. Apple has a closed eco-system whereby its a single handset and OS. The important thing to remember here is that Android as an operating system has thrashed Apple’s iOS. But, Apple as a handset manufacturer is still ahead. Samsung shipped 200m units of its Galaxy S1/2 range to Apple’s 300 million iPhone range! HTC is in a distant third with 150m units.

      The idea, as Steve Jobs did, that Android was grand theft is just wrong! Google, along with its Open Handset Alliance were clever. You see the wealthier iTunes members of society are always and were always going to buy iPhone but a larger and wider coterie of society made up of different economic buying-powers made Android a banner of individuality and freedom which Apple was not.

      People who buy Galaxy S2s or HTC Desire S’s or even Motorolas dont want or even think about the iPhone. The 50m units Samsung has shipped of its Samsung Galaxy Y handset shows that to dominate – do as Intel and Windows did – make ‘em cheaper and that way you get the market share. Apple’s not interested in the tens of millions of people who cant afford ÂŁ 600 for an iPhone. But Google, Samsung and thousands of developers are, and they will cash in for their troubles too.

      And turning the argument from Android vs Apple market share to iPads is just plain disingenuous!! Apple is now showing its colours!! Ingenuity, Consumer power and Freedom – words Jobs used in 1998 – are no longer part of the Apple corpus of products. The suing and patent litigation shows just that – buying a small company for patents and then suing rivals for using those patents shows how Apple operates. It’s not about design or ingenuity its about anti-competitiveness. That’s what Apple does. It’s kind of ironic that Jobs complained bitterly about Bill Gates in the 90s being anti-competitive but a decade later had no problem doing the same thing eh!!

  • stevelucky

    Wait a minute. Wasn’t the point of the original Piper Jaffray article to point out how much more money Apple is pulling in vs Google via their respective appstores? I don’t think it was their intent to point out how much revenue developers were making. Apple doesn’t make a dime from ad-supported free apps. All the numbers that I saw pointed to Apple’s revenue and Google’s revenue. You’re article take a completely different slant on the topic. One that I think is really cool, and worth exploring, but you’re touting it as more of an exposĂ© pointing out how Piper Jaffray twisted the numbers. It seems like it’s a case of apples and oranges (pun intended or not… you decide!).

  • Anonymous

    You’re also forgetting the fact that there are several other app markets out there for android.

    • http://pulse.yahoo.com/_TIPIL3NBQSPA6HFYWUG76ZMU6E lilmoe 2002

      Thank you.
      Just like how you can’t compare a particular android device “alone” to the iPhone, you can’t compare the android market “alone” to the appStore.

      People (Phone Users, Writers, Bloggers, and some Devs) don’t fully understand what Android’s “open architecture” means. There are no straightforward means to demonstrate/compare the revenue made by any sector of the Android platform.

      The only valid comparison might be the AppStore vs Windows Marketplace, because the their distribution/revenue approach is similar if not identical. That’s simply not the case with Android apps.

      I’m sure lots of devs know this fact though.

  • http://profiles.google.com/eric.soulliage eric Soulliage

    one word comes to my mind : Gouging

  • Jeet

    Ya this is true that android apps earn less when compared to ios. But this is not the case for everyone. You should have the right approach to get a good revenue from your app. I am writing a blog on it. Visit it to get a new approach to your view.
    http://androiddevelopmentforeveryone.blogspot.in/