Mobile devices have become ubiquitous, and with this, companies are also turning to mobile devices for profit. We know that Apple earns a hefty markup from each iPhone, iPad and just about any iDevice sold. Android manufacturers, meanwhile, have a slimmer margin. Some even sell their products at cost or at a loss, and recoup the investment from content sales.
A recent article by Kevin Tofel on BusinessWeek has me wonder about my Android-related consumption. Tofel asks whether Google — and other companies — are seeing profit from the Android ecosystem. While Google has proudly announced 1.3 million Android activations daily, the ecosystem is set to exceed 1 billion devices by 2013.
The question is profitability.
Early in Android’s short lifespan, it seemed to me that subsidizing a free, open-source platform to make a land grab for mobile eyeballs was a good play that would pay off over time. Nearly four years later, there’s little data to suggest the investment is paying off. In fact, more data suggests Apple’s methodical approach is financially sound.
Market studies aside, Tofel uses a simpler benchmark: how much do you spend in either ecosystem? This includes apps, content (like e-books, music) and even the cost of the device itself. In Tofel’s case, he has spent about $150 on Android apps, but says he has spent five times this amount on iOS, even though he uses his Android phone as his primary device.
E-books are another question, though, which means Amazon might have found the right business model for monetizing Android in its Kindle lineup.
And so, dear readers, we ask you. How much have you spent on the Android ecosystem, so far? I know most of us love “free” but some devices, apps and content are bound to have a cash value. I must admit I’ve only spent about $10 on Android apps, which includes a few games for my kids. On iOS, I haven’t spent a dime!