Google Play Store revenue to surpass Apple’s app store by 2018

July 18, 2014
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Although Google’s Android platform has long surpassed iOS in terms of its worldwide user base, there is still one area where Apple has managed to keep its nose out in front – store revenue.

However, according to Radio Free Mobile analyst Richard Windsor, revenue generated by the Google Play Store is expected to surpass that of Apple’s App Store by 2018.

Google Play Store vs Apps Store revenue 2018

Over this time period, not much is expected to change in terms of consumer purchasing habits or spending. Previous research into the various app revenue types for Android and iOS have shown that freemium apps continue to the preferred app type amongst consumers on both Apple’s and Google’s platform, this trend is expected to consolidate on the Android platform this year.

Apple customers will continue to display a slight preference for paid apps and those with in-app purchases, when compared with Android users. However, the gap appears to be closing, with fewer iOS customers purchasing paid apps than last year, with more users switching to the freemium model.

App store front revenue by type

Instead, a simple explanation of the increase in Google’s revenue is that the sheer size of its market share is leading to more income. The latest market share statistics show a continued swing away from iOS towards Android in some of the world’s largest markets, and that Android now holds over 80 percent of the market in emerging economies like China, and a similar trend can be seen in some European countries.

Android vs iOS sales 2013 and 2014

The IDC has forecast that the average smartphone selling price will fall to $335 this year, half the price of an iPhone 5S. Appetite for a wide range of handset specs and sizes, combined with a falling average price is certainly a major factor in Google’s growing market share, and this trend is expected to continue over the next decade.

However, it is not just cheaper hardware prices driving Google’s market growth. Android’s ecosystem has grown and matured over the past several years, which has drawn in additional investments in app development and put Android on an equal playing field with the once dominant iOS. We are seeing fewer and fewer apps built exclusively for iOS, and the time taken to port apps between platforms continues to fall. Henry Cipolla, chief technology officer of app analytics and marketing at Localytics, suggests that Google’s improvements to backwards compatibility and its software development tools has helped to reduce the development problems associated with fragmented hardware.

App development on Android is technically more challenging due to its fragmentation … but since Google improved backward compatibility that simplifies writing one app for many Android versions it is less of an obstacle

Per customer, Google will likely continue to generate less revenue than its rival, even into 2018. However, the continued growth and appeal of the Android operating system, both to consumers and app developers, looks set to result in Google catching up with, and surpassing, Apple in terms of total revenue generated from apps.

Comments

  • MasterMuffin

    It would be pretty stupid if the huge amount of Android users (that is just getting bigger and bigger) couldn’t surpass iOS in this statistic.

  • Jeff Maxwell

    The flattening (and even reduction) of iOS revenue beginning in 2016 that is portrayed in this projection seems arbitrary. According to this analysis, it is this flattening that allows Android to overtake in 2018 (versus accelerated Android growth). Given the current trend lines for iOS, It’s hard to accept such a projection without explanation. If each OS continues on its current growth trajectory, such an overtake doesn’t occur.

    I could accept accelerated Android revenue growth rates as reasonable. I find it much harder to accept reduced iOS revenue growth – especially when the conclusions of the analysis depend on that happening. The historical trend lines simply don’t support it.

  • brian.

    There’s quite a bit of talk about the apps in the original article, but the graph is a little screwy. Please correct if I’m wrong, but does that graph show the App Store vs. the Android Apps within Google Play? Because Google Play is technically apps, books, music, movies, etc.? Analysts say the silliest things, and there’s no telling what will happen in four years, but the graph itself seems a bit wonky to me.

  • Timmy

    Hmm, maybe this explains it.

    Android user: “Wow, there are lots of calendar apps. This one costs $9.99 so F&*! that, I’m getting this one for .99 that does the same thing.

    iOS user: “Wow, there are lots of calendar apps. This one costs .99 so F&*! that, I’m getting this one for $9.99 so I can be cool.

    It seems like it would be inevitable for the growing number of Android users to eventually overtake iOS in total revenue. A bazillion users buying a .99 cent app is more than only a few million buying the $9.99 one.

  • Giovanni

    What’s the app name of the notification to the far left?