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

November 22, 2011
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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]

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