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Every time Google releases a new version of Android, the platform’s monetization rates improve

Despite Android being free, Google and others developers do manage to make money off of it. The question is how much. For each new version of Android, the platform monetization rates go up. As of Jelly Bean, Android makes the most money they've ever made off of any prior Android OS version.
October 26, 2012
It is no secret that both Google and Android developers makes money with Android. Granted, they don’t charge for it out of the box like some operating systems do. However, they still find ways to draw a little money out of it. What is interesting is that each new version of Android manages to get a higher ARPU. For those who don’t know, ARPU is Average Revenue Per User.

So what does this mean exactly? Well, aside from the tablet only Honeycomb, how much money a user generates for applications has been trending upward. This goes back as far as Android Astro, for all nine people out there who have heard of Android Astro.

Back then, the ARPU was a mere $0.20 per person. As of Jelly Bean, the rates have jumped to $1.63 per person. This is according to a study done by Tapjoy.

This means that if you want to make the most money per person off of an Android app, your best bet would be to make an application that’s compatible with Jelly Bean. However, there is some context here. Even though Jelly Bean users generate the most revenue per person, there really aren’t that many people running Jelly Bean.

According to the chart above, more than half of all Android owners are still running Gingerbread 2.3.x. Second to that is FroYo, with about one in every five users running it. So even though Jelly Bean generates more money per person than these outdated versions, there are way more people who aren’t running Jelly Bean.


So which version of Android should developers develop for?

Ostensibly, all of them. many Android applications have a minimum OS requirement. You could make an app that’s compatible with Jelly Bean but still runs on FroYo. That would, of course, be your best plan if you were trying to make money.

However, for the sake of hypothetical situations, if you were to develop for just one version, logic and Tapjoy agree that it be Gingerbread. It doesn’t make as much per person, but there are a whole lot more people running it.

If Google ever gets this fragmentation problem fixed, these higher monetization rates for developers could be a big deal. An extra $0.40 or $0.50 per person may not seem like a lot, but when we’re talking millions of downloads, we’re talking millions of dollars too. It’s all about the context. Android developers, what OS do you predominately develop for?