All Android store competitors combined poised to overtake Apple's iOS App Store by revenue...

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in iPod + iTunes + AppleTV
A report on global mobile app markets notes that Apple's iOS App Store remains the world's largest by revenues and is predicted to hold onto its crown as "the most lucrative" through 2021, although all of the world's competing Android software markets combined are expected to exceed the App Store in total revenues at some point later this year.


No store will be larger than Apple's, but all stores together will be! Source: App Annie

Apple's App Store profit lead keeps growing

The report, by App Annie, looks at total revenues (split by the store and its developers), as well as initial downloads of apps. It does not appear capable of tracking first party apps or subscriptions, which would include revenues from titles such as Apple Music, Keynote and Garage Band, nor does it appear to count downloads of bundled apps such as iOS Maps, News and Wallet. Many Android phones do need to download compatible titles on that platform, although these do not count toward much, if any, revenue.

In January 2016, App Annie reported figures for 2015, noting that despite a large jump in Android app downloads from Google Play fueled by the company's expansion into developing markets, Apple's iOS App Store continued to bring in more money and actually increased its lead in profitability over Android's official store.

By the beginning of 2016, iOS was reportedly earning 75 percent more than Google Play--an increase over Apple's 2014 lead of 70 percent greater trackable revenues than Google Play.

While downloads in Google Play were growing, App Annie reported that its "revenue lags," and warned that "Android market share needs to grow at the high end of the smartphone market to meaningfully drive more revenue share."Despite serving twice the trackable downloads of the App Store, Google Play had only half the revenues of Apple

At the time, Apple's downloads were also growing: 20 percent in the U.S., 30 percent in Japan and fully doubling in China.

By July, App Annie was reporting that despite serving twice the trackable downloads of the App Store, Google Play had only half the revenues of Apple.

In particular, Apple was reported to be seeing a huge jump in revenues related to streaming music (Spotify and Apple Music) and entertainment (Netflix and HBO Now), while Google wasn't benefitting nearly as much from growth in those areas.


Last year Apple's App Store had twice the revenue of Google Play despite half the downloads

The Death of Apps Lie of 2016

Around the same time, a media narrative began to unfold that apps no longer mattered and that users didn't care about software anymore. The new thing was supposed to be AI chat bots.

Peter Kafka gravely warned via Recode that "the app boom is over" as total U.S. app downloads reportedly declined year over year by 20 percent. Dan Frommer had earlier written for Quartz that most users weren't downloading any apps at all, on average each month, based on data from comScore.

Something wasn't true. During Apple's "very bad / second best quarter in history" that ended last March, the company's Services revenue grew by 20 percent, making it nearly a $6 billion business quarterly. That Services growth was specifically detailed in Apple's 10Q as being "due primarily to higher App Store, licensing and AppleCare sales."

Nevermind the pundits, apps are actually growing rapidly

Not even a year later, App Annie is now predicting massive growth in App Store downloads and revenues over the next four years. Rather than apps being dead--as various pundits have been grousing about since 2014--the site says that growth is picking up and will occur even faster than the group earlier predicted just last summer.

In the same report from July referenced above, App Annie pointed to a 20 percent CAGR (compound annual growth rate), calling for $102 billion in worldwide gross revenues from mobile apps by 2021.

The group now calls for a 25 percent CAGR in global mobile app revenues, assisted by App Store subscriptions, leading to total revenues of $139 billion in 2021. Games are predicted to account for $105.2 billion, while other apps are expected to amount to $33.8 billion in revenues.


Apple isn't largest by downloads. Source: App Annie


Google Play and other Android app markets are expected to far outpace Apple in the number of apps downloaded (above). The group says Apple distributed 29 billion app downloads in 2016 and predicts that number will grow to 42 billion by 2021. However, Google Play users reportedly downloaded 63 billion apps last year and are predicted to reach 196 billion by 2021, while other Android app markets are expected to grow from last year's 55 billion to 112 in five years. Apple's App Store will remain the world's largest mobile software market

In terms of direct, app-related revenues, however, Apple's App Store will remain the world's largest mobile software market. App Annie reported $34 billion in revenues for 2016 growing to $60 billion in 2021, while Google Play is expected to grow from 2016's $17 billion to $42 billion in five years, while other Android stores grow from $10 billion to $36 billion.

Add Google Play together with all the stores in China and other markets that compete against it, and you have a number larger than Apple's App Store revenues. Adding Chinese Android stores to Google Play is important because much of that growth is expected to come from China, where Google does little business on its own. Conversely, Chinese app stores do very little business in the West. Only Apple earns massive revenues in both of the world's largest mobile markets.

Developers make most of their money on the App Store, too

Beyond revenue, Apple also earns greater profits from the App Store because its demographic of users are far more willing and likely to pay for software.



Last year, Ustwo Games reported 40 percent of its iOS users paid to install its award-winning title "Monument Valley," while only 5 percent of Android users paid. The rest were largely downloading pirated copies.

Of the 2.4 million sales of the game, 1.7 million were on iOS while less than 0.3 occurred on Google Play. Over 80 percent of the developer's revenue came from iOS users. Those statistics play a major role in why gaming, productivity apps and other mobile software tools are commonly built exclusively for iOS or are released on iOS first, and are commonly brought to Android only later in a version with ads.

One notable departure is Apple Music, which offers an ad-free version of its subscription-based service as an Android app.
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Comments

  • Reply 1 of 33
    sflocalsflocal Posts: 3,652member
    Honestly... someone needs to call these clowns out for what is basically flat-out lying.  Gone of the days of journalism based on facts and hard data.

    watto_cobra
  • Reply 2 of 33
    sflocal said:
    Honestly... someone needs to call these clowns out for what is basically flat-out lying.  Gone of the days of journalism based on facts and hard data.

    Couldn't agree more. Such lazy reporting, based on such cheap data.

    Yet, for all the headlines, no one can name one company that's making a serious profit off Android (except Samsung, which certainly picks up some profit scraps; yet the irony is that they're the company that was trying to come up with some silly alternative to Android).
    watto_cobra
  • Reply 3 of 33
    SpamSandwichSpamSandwich Posts: 26,169member
    LOL. This was my first reaction to the headline.
    watto_cobra
  • Reply 4 of 33
    kevin keekevin kee Posts: 448member
    The headline...

    Every big countries are sending their droids to destroy a puny island of Apple which has 60% of the world economy... 
    watto_cobra
  • Reply 5 of 33
    lwiolwio Posts: 60member
    Ah Daniel you're forgetting the increasing market in hijacking and selling private information on Droid phones. Surely that has to count for something.
    watto_cobra
  • Reply 6 of 33
    rogifan_newrogifan_new Posts: 1,582member
    What do you mean "by profits"? How do we know how much profit Apple, Google or anyone else are making off their app stores? Apple has never disclosed App Store profits, I don't think has anyone else has either. I don't understand the weird obsession this site has with how much profit Apple makes as though that's all that's matters or all that anyone should care about. This isn't a biggest dick contest. I don't own Apple products because Apple makes the most profit. 
  • Reply 7 of 33
    Well, the higher Apple's profit is, the higher the margin over total costs they're charging you as a consumer. Since no one's holding a gun to anyone's head to buy an Apple product, that means you're paying relatively more, all else equal.

     So it's silly of you to suggest that you couldnt give a damn about the company's profits.
    edited March 30 lolliverwatto_cobra
  • Reply 8 of 33
    avon b7avon b7 Posts: 874member
    sflocal said:
    Honestly... someone needs to call these clowns out for what is basically flat-out lying.  Gone of the days of journalism based on facts and hard data.

    Couldn't agree more. Such lazy reporting, based on such cheap data.

    Yet, for all the headlines, no one can name one company that's making a serious profit off Android (except Samsung, which certainly picks up some profit scraps; yet the irony is that they're the company that was trying to come up with some silly alternative to Android).
    You would have to define 'serious' to be able to name a company. Would $200,000,000 be serious profit?

    Inside Apple, is the Mac line bringing in serious profit and if it isn't (when compared to iDevice revenues) does it really matter?

    If you're making money, surely that's a good start. If you're making money and taking clients away from potential competitors, its even better. If you strive to improve your results then it's better still.
  • Reply 9 of 33
    sog35sog35 Posts: 12,367member
    What do you mean "by profits"? How do we know how much profit Apple, Google or anyone else are making off their app stores? Apple has never disclosed App Store profits, I don't think has anyone else has either. I don't understand the weird obsession this site has with how much profit Apple makes as though that's all that's matters or all that anyone should care about. This isn't a biggest dick contest. I don't own Apple products because Apple makes the most profit. 
    Profits are not important? What? Are you kidding me?

    Profits are the life blood of companies. Without profits a company will eventually die. A lack of profits also leads to less spend on R&D. Lack of profits leads to cutting corners and lower quality products. So yes profits matter. Without profits you won't be able to retain top talent and recruit top talent.

    So how can we calculate Apple App store profits? Pretty easy.  30% of App sales Apple keeps. 15% for certain subscriptions. Pretty easy.
  • Reply 10 of 33
    sog35sog35 Posts: 12,367member
    sflocal said:
    Honestly... someone needs to call these clowns out for what is basically flat-out lying.  Gone of the days of journalism based on facts and hard data.

    Couldn't agree more. Such lazy reporting, based on such cheap data.

    Yet, for all the headlines, no one can name one company that's making a serious profit off Android (except Samsung, which certainly picks up some profit scraps; yet the irony is that they're the company that was trying to come up with some silly alternative to Android).
    Exactly.

    And I don't believe the stats for one second.

    How the HELL will 3rd party Android App revenue DOUBLE from 2016 to 2017? Going from $10 billion to $20 billion? That is utter bullcrap. There is no way that is coming true. 3rd party Android App revenue is mostly in China and some Amazon Fire sales. No way in HELL are those DOUBLING in the next year.


    lolliverwatto_cobra
  • Reply 11 of 33
    sog35sog35 Posts: 12,367member
    avon b7 said:
    sflocal said:
    Honestly... someone needs to call these clowns out for what is basically flat-out lying.  Gone of the days of journalism based on facts and hard data.

    Couldn't agree more. Such lazy reporting, based on such cheap data.

    Yet, for all the headlines, no one can name one company that's making a serious profit off Android (except Samsung, which certainly picks up some profit scraps; yet the irony is that they're the company that was trying to come up with some silly alternative to Android).
    You would have to define 'serious' to be able to name a company. Would $200,000,000 be serious profit?

    Inside Apple, is the Mac line bringing in serious profit and if it isn't (when compared to iDevice revenues) does it really matter?

    If you're making money, surely that's a good start. If you're making money and taking clients away from potential competitors, its even better. If you strive to improve your results then it's better still.
    Fair enough.

    Now tell us what companies are making profit on Android.................I'll be waiting
    watto_cobra
  • Reply 12 of 33
    News flash:  If you combine every country in the world, the combined military power is greater than the US.

    News Flash:  Chevrolet, Mitsubishi, Kia, Hyundai, Honda, and Suzuki combined sell more cars than Ford.

    It's amazing how you can make numbers say anything you want.
    lkruppwatto_cobra
  • Reply 13 of 33
    avon b7avon b7 Posts: 874member
    sog35 said:
    avon b7 said:
    sflocal said:
    Honestly... someone needs to call these clowns out for what is basically flat-out lying.  Gone of the days of journalism based on facts and hard data.

    Couldn't agree more. Such lazy reporting, based on such cheap data.

    Yet, for all the headlines, no one can name one company that's making a serious profit off Android (except Samsung, which certainly picks up some profit scraps; yet the irony is that they're the company that was trying to come up with some silly alternative to Android).
    You would have to define 'serious' to be able to name a company. Would $200,000,000 be serious profit?

    Inside Apple, is the Mac line bringing in serious profit and if it isn't (when compared to iDevice revenues) does it really matter?

    If you're making money, surely that's a good start. If you're making money and taking clients away from potential competitors, its even better. If you strive to improve your results then it's better still.
    Fair enough.

    Now tell us what companies are making profit on Android.................I'll be waiting
    http://fortune.com/2016/11/23/huawei-displaces-samsung-most-profitable-android-smartphone-maker/
  • Reply 14 of 33
    lkrupplkrupp Posts: 4,702member

    Nevermind the pundits, apps are actually growing rapidly
    Nevermind (sic) the pundits about anything. Or pick a pundit who bloviates to your particular bias and stick with him/her.
    watto_cobra
  • Reply 15 of 33
    lkrupplkrupp Posts: 4,702member
    sflocal said:
    Honestly... someone needs to call these clowns out for what is basically flat-out lying.  Gone of the days of journalism based on facts and hard data.

    Most of this is caused by the gullibility and ignorance of the general public. Study after study show that people tend to believe what they read. It’s how alternative facts came to be.
    lolliverwatto_cobra
  • Reply 16 of 33
    tmaytmay Posts: 1,716member
    avon b7 said:
    sog35 said:
    avon b7 said:
    sflocal said:
    Honestly... someone needs to call these clowns out for what is basically flat-out lying.  Gone of the days of journalism based on facts and hard data.

    Couldn't agree more. Such lazy reporting, based on such cheap data.

    Yet, for all the headlines, no one can name one company that's making a serious profit off Android (except Samsung, which certainly picks up some profit scraps; yet the irony is that they're the company that was trying to come up with some silly alternative to Android).
    You would have to define 'serious' to be able to name a company. Would $200,000,000 be serious profit?

    Inside Apple, is the Mac line bringing in serious profit and if it isn't (when compared to iDevice revenues) does it really matter?

    If you're making money, surely that's a good start. If you're making money and taking clients away from potential competitors, its even better. If you strive to improve your results then it's better still.
    Fair enough.

    Now tell us what companies are making profit on Android.................I'll be waiting
    http://fortune.com/2016/11/23/huawei-displaces-samsung-most-profitable-android-smartphone-maker/
    Yeah!!! $200 million in profit!!! Of course, that's with the caveat that Samsung profits collapsed with the Note 7 battery issue.

    From your link;

    "That means that Samsung can easily bounce back in the coming months and year with the launch of a new flagship product. But privately-held Huawei still aims to be the second biggest player in the smartphone arena behind Apple within two years, says the company's consumer business CEO Richard Yu Chengdong."

    Apple is doomed! something, something.
    edited March 30 watto_cobra
  • Reply 17 of 33
    sog35sog35 Posts: 12,367member
    avon b7 said:
    sog35 said:
    avon b7 said:
    sflocal said:
    Honestly... someone needs to call these clowns out for what is basically flat-out lying.  Gone of the days of journalism based on facts and hard data.

    Couldn't agree more. Such lazy reporting, based on such cheap data.

    Yet, for all the headlines, no one can name one company that's making a serious profit off Android (except Samsung, which certainly picks up some profit scraps; yet the irony is that they're the company that was trying to come up with some silly alternative to Android).
    You would have to define 'serious' to be able to name a company. Would $200,000,000 be serious profit?

    Inside Apple, is the Mac line bringing in serious profit and if it isn't (when compared to iDevice revenues) does it really matter?

    If you're making money, surely that's a good start. If you're making money and taking clients away from potential competitors, its even better. If you strive to improve your results then it's better still.
    Fair enough.

    Now tell us what companies are making profit on Android.................I'll be waiting
    http://fortune.com/2016/11/23/huawei-displaces-samsung-most-profitable-android-smartphone-maker/
    That $200M in profit is an estimate by a trade group.

    Huawei is a private company so they never release smartphone profits. That $200M figure is a total GUESS by Strategy Analytics. Its a total bull crap number based on zero facts. The only data they have is total number of phones sold by Huawei and revenue. Both which could be total lies by a China brand. There is no data on expenses, R&D, ect. So no way to accurately measure profit.

    Strategy Analytics is using ESTIMATE to calculate profit. Estimates on cost of the phone, labor, marketing, R&D, ect.  Huawei had about $6 billion in smartphone sales. If Strategy Analytics ESTIMATE was just off by 5% then Huawei would have had a $100M loss instead of a $200M gain. 
    edited March 30 lolliverwatto_cobra
  • Reply 18 of 33
    carnegiecarnegie Posts: 137member
    sog35 said:
    avon b7 said:
    sog35 said:
    avon b7 said:
    sflocal said:
    Honestly... someone needs to call these clowns out for what is basically flat-out lying.  Gone of the days of journalism based on facts and hard data.

    Couldn't agree more. Such lazy reporting, based on such cheap data.

    Yet, for all the headlines, no one can name one company that's making a serious profit off Android (except Samsung, which certainly picks up some profit scraps; yet the irony is that they're the company that was trying to come up with some silly alternative to Android).
    You would have to define 'serious' to be able to name a company. Would $200,000,000 be serious profit?

    Inside Apple, is the Mac line bringing in serious profit and if it isn't (when compared to iDevice revenues) does it really matter?

    If you're making money, surely that's a good start. If you're making money and taking clients away from potential competitors, its even better. If you strive to improve your results then it's better still.
    Fair enough.

    Now tell us what companies are making profit on Android.................I'll be waiting
    http://fortune.com/2016/11/23/huawei-displaces-samsung-most-profitable-android-smartphone-maker/
    That $200M in profit is an estimate by a trade group.

    Huawei is a private company so they never release financial information. Nice try though.
    Huawei does release financial information. It should be releasing its annual report for 2016 in a couple of days.

    As is the case with many companies (to include Apple), it doesn't report profits by operating segment or product category. But it does discuss operating segments individually.

    Huawei likely makes only modest profits from smartphones as compared to what Apple makes from smartphones. For one thing, while its smartphone product mix has been improving, it still doesn't sell nearly as many premium (i.e. higher price and higher margin) smartphones as Apple does. For that reason and others its gross margins for its consumer business are lower than its company-wide gross margins. Also, while Huawei's company-wide gross margins are actually better than Apple's, its operating margins are much lower because it spends so much on R&D and SG&A. 
  • Reply 19 of 33
    carnegiecarnegie Posts: 137member

    sog35 said:
    What do you mean "by profits"? How do we know how much profit Apple, Google or anyone else are making off their app stores? Apple has never disclosed App Store profits, I don't think has anyone else has either. I don't understand the weird obsession this site has with how much profit Apple makes as though that's all that's matters or all that anyone should care about. This isn't a biggest dick contest. I don't own Apple products because Apple makes the most profit. 
    Profits are not important? What? Are you kidding me?

    Profits are the life blood of companies. Without profits a company will eventually die. A lack of profits also leads to less spend on R&D. Lack of profits leads to cutting corners and lower quality products. So yes profits matter. Without profits you won't be able to retain top talent and recruit top talent.

    So how can we calculate Apple App store profits? Pretty easy.  30% of App sales Apple keeps. 15% for certain subscriptions. Pretty easy.
    That tells us how much revenue Apple gets from App Store sales, it doesn't tell us how much profit Apple realizes on that revenue. Apple doesn't report profit by category (let alone by particular services or products within the categories), so we'd have to estimate it. Does Apple realize 90% or 70% or 50% of its (own share of) App Store revenue (which we also have to estimate, but which we can fairly confidently get a ballpark for) as profit? It's probably toward the high end because now we're only talking about the revenue that Apple keeps (and records for itself). But we still have to estimate it and it's something less than 30% of total App Store revenue (or 15% of certain subscription revenue).
    lolliver
  • Reply 20 of 33
    carnegiecarnegie Posts: 137member
    avon b7 said:
    sog35 said:
    avon b7 said:
    sflocal said:
    Honestly... someone needs to call these clowns out for what is basically flat-out lying.  Gone of the days of journalism based on facts and hard data.

    Couldn't agree more. Such lazy reporting, based on such cheap data.

    Yet, for all the headlines, no one can name one company that's making a serious profit off Android (except Samsung, which certainly picks up some profit scraps; yet the irony is that they're the company that was trying to come up with some silly alternative to Android).
    You would have to define 'serious' to be able to name a company. Would $200,000,000 be serious profit?

    Inside Apple, is the Mac line bringing in serious profit and if it isn't (when compared to iDevice revenues) does it really matter?

    If you're making money, surely that's a good start. If you're making money and taking clients away from potential competitors, its even better. If you strive to improve your results then it's better still.
    Fair enough.

    Now tell us what companies are making profit on Android.................I'll be waiting
    http://fortune.com/2016/11/23/huawei-displaces-samsung-most-profitable-android-smartphone-maker/
    Huawei likely does make money on smartphones. But being ahead of Samsung in that area was a bit of an anomaly. Samsung's IM segment profit was tiny in that quarter because of the Note 7 issue. Samsung's profit from that segment rebounded considerably in the following quarter.

    Going forward Huawei may challenge Samsung when it comes to smartphone profits if its product mix continues to improve and its total sales continue to grow as they have in recent years, and if it cuts back on R&D spending which has been - at least company-wide - through the roof. Who knows whether and to what extent those things will happen?
    edited March 30
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