Apple iOS App Store is trouncing Google Play in services, subscriptions

Posted:
in iOS edited April 2018
Apple's U.S. customers installed 45 new iPhone apps in 2017, a growth of 10 percent over last year, while Services revenue from In-App Purchases and Subscriptions expanded by 23 percent--driven by games, music and video streaming and dating services. And overall, Apple's U.S. App Store customers drove significantly higher revenue per user ($58) than Google Play ($38).


The App Store grew significantly in 2017, thanks in part to better merchandizing

The report of my death was an exaggeration

It seems like it was just yesterday that prominent bloggers from Quartz, Tech Crunch, The Verge and elsewhere were building a media narrative that mobile apps were dead.

From "The Apple App Store graveyard" to "Forget Apps, Now The Bots Take Over," a series of articles sought to explain how Apple's mobile software platform was doomed and that the next big thing in mobile software was somehow coming in the form of chatbots or AI voice services.

Recent U.S. data from Sensor Tower shows that outlook was indeed wrong. The company noted that customers installed an average of 45 new iPhone apps in 2017, about 4 more than they had in 2016. One contributor to this growth is likely Apple's efforts to highlight content in the App Store and make it easier to search for and discover titles, with high-quality, magazine-like merchandising.




And beyond downloads, users were volunteering to pay for more App Store content as well. Games alone drove about 62 percent of total revenues, or $36 per user, mostly from In-App Purchases. Again, Apple's App Store overhaul specifically calls out games in their own store panel, separate from other apps.

Apple eats up subs

Another new area of growth is subscriptions. Video entertainment services including HBO NOW, Hulu and Netflix grew by 57 percent to reach $4.40 in spending per user.

Sensor Tower reported Music streaming separately, with services such as Pandora and Spotify generating nearly as much revenue per user: $4.10. It's not clear if that figure also includes first-party revenues from Apple Music.

"Lifestyle" apps, largely driven by dating services such as Bumble, Grindr and Tinder, drove subscriptions that were more than twice as high as the previous year, reaching revenues of $2.10 per user.

Social media app revenues reached $3.60, up 38 percent, from in-app tipping in services including Periscope, Live.me, YouTube Gaming; VoIP call credits in Skype; and from subscriptions to services including Microsoft's LinkedIn.

Apple has focused on subscription revenues as a growth opportunity in the App Store, and has also focused on its own subscription content, ranging from Apple Music to new efforts to produce original video and news, as AppleInsider reported a month ago.


Apple is learning Services faster than Google is learning hardware

While the general tech media has tried to portray Google's hardware initiatives as anything other than the complete failure they have been, they are also missing that Apple is moving into monetizing mobile Services far better than Google, which historically mastered revenue generation from services on the PC platform.

Randy Nelson, Sensor's head of mobile insights, stated, "we estimate that for each active Android device in the U.S. last year, approximately $38 was spent on Google Play-on and in apps-so about $20 less than iOS.

"That tracks with the disparity in revenue generation we see between the stores outside the per-device level. Android users generally spend less on or in apps, Google Play generated about 60 percent of the App Store's revenue last year in the U.S."

Android users can download apps outside of Google Play, and content vendors can bypass Google to sell subscriptions directly, but both Google and Android enthusiasts note that shopping outside of Google Play is exceptionally dangerous due to the malware and spyware that saturates open software markets. Even Google Play keeps finding active Android exploits in its own distribution.
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Comments

  • Reply 1 of 28

    but both Google and Android enthusiasts note that shopping outside of Google Play is exceptionally dangerous due to the malware and spyware that satiates open software markets.
    This is a bit like saying walking outside is dangerous. Yes, it can be, if you have must or choose to frequent dangerous areas. But the vast majority of people buying outside of the play store (in the US, as this data looks at) are giving their money to established companies like Spotify and Netflix on a desktop.

    DED, it would be interesting to see an unbiased look at the two different business models. Rather than saying Google fails at being Apple, why not look at what it is actually trying to do. Its goal is to get many devices into hands and make money from advertising in apps rather than clip the ticket on app purchases. The world is better if we have competing business models.
    muthuk_vanalingamsingularity
  • Reply 2 of 28

    but both Google and Android enthusiasts note that shopping outside of Google Play is exceptionally dangerous due to the malware and spyware that satiates open software markets.
    This is a bit like saying walking outside is dangerous. Yes, it can be, if you have must or choose to frequent dangerous areas. But the vast majority of people buying outside of the play store (in the US, as this data looks at) are giving their money to established companies like Spotify and Netflix on a desktop.

    DED, it would be interesting to see an unbiased look at the two different business models. Rather than saying Google fails at being Apple, why not look at what it is actually trying to do. Its goal is to get many devices into hands and make money from advertising in apps rather than clip the ticket on app purchases. The world is better if we have competing business models.
    If Google weren’t trying to emulate Apple that might be true. Google tried to sell cheap hardware and failed. It then tried selling premium hardware and failed even more.

    So no, Gools has not just been focused on mobile ads. And it hasn’t even performed well in mobile ads. 

    Mobile ads pay far less than display ads on PC, and display ads are generally not very valuable anyway. Google’s main revenue source was never generic ad banners but paid placement of advertising next to search results.

    In mobile, people do not search Google so much. They go use dedicated apps. And nobody playing a game cares about banner ads. There’s little real value in in app ads. 

    If we can criticize Apple for failings with Mobile Me, early iCloud and iAd, then why do you think Google needs to be handled like a child after if blew through many billions and laid off thousands of workers in hardware, and is now (the subject of this article) falling behind in services despite having so many more low value accounts tied to its Android platform?


    racerhomie3StrangeDaysRayz2016jbdragonosmartormenajrtmayminisu1980jony0watto_cobra
  • Reply 3 of 28
    Just subscribed to Hotspot Shield through Mac Appstore for $48 a year. Good deal. You don't get that from their website. Guess I'm contributing to the number.

    Also considering Film Struck + Criterion Collection for around $8 a month (yearly price). Used to buy Criterion disc for $30 regularly so it looks like a very good deal for me.
    edited April 2018 racerhomie3watto_cobra
  • Reply 4 of 28
    Dan when you use “satiates” in the final paragraph do you mean permeates?
    watto_cobra
  • Reply 5 of 28
    Well Doh!

    Wasn't there a report stating that somthing around 80% of American Teenagers (13-19) have an iPhone????

    Take that into consideration then this report is IMHO just clickbait.

    What about the rest of the World then? Even Europe with a bigger market size than the USA? Where does that come then? I'll bet that it shows a different story.
    My granddaughter said recently that some of her peers (aged 14) look down on her for having an iPhone with parental controls enabled (her father works in IT security for a Bank). Her peers can do anything on their phones including a lot of frankly bad stuff.
    A form of not so subtle bullying perhaps?
    There is a whole world out there besides the lower 48 states.
  • Reply 6 of 28
    rogifan_newrogifan_new Posts: 3,994member
    More estimates from analyst firms treated as news. It’s not news and it’s not rumors it’s just noise. Does DED ever get tired of the company X sucks because it’s not Apple/doesn’t have Apple’s business model theme?
    avon b7singularity
  • Reply 7 of 28
    croprcropr Posts: 938member

    In mobile, people do not search Google so much. They go use dedicated apps. And nobody playing a game cares about banner ads. There’s little real value in in app ads.
    Nonsense.  If this were true, Google would not pay Apple that much for being the preferred search engine in mobile Safari.
    avon b7netmagerogifan_newmuthuk_vanalingam
  • Reply 8 of 28
    mjtomlinmjtomlin Posts: 1,858member
    cropr said:

    In mobile, people do not search Google so much. They go use dedicated apps. And nobody playing a game cares about banner ads. There’s little real value in in app ads.
    Nonsense.  If this were true, Google would not pay Apple that much for being the preferred search engine in mobile Safari.

    Of course they would! You're talking about a billion active devices. That's a HUGE chunk of the mobile user base and well worth the couple of billion Google's paying Apple.
    jbdragontmaywatto_cobra
  • Reply 9 of 28
    racerhomie3racerhomie3 Posts: 1,100member
    Oh Roofigan! 
    How are your Amazon & Facebook bots doing now?
    StrangeDaysosmartormenajrwatto_cobra
  • Reply 10 of 28
    More estimates from analyst firms treated as news. It’s not news and it’s not rumors it’s just noise. Does DED ever get tired of the company X sucks because it’s not Apple/doesn’t have Apple’s business model theme?
    So you don't think it's generally true that Apple's services growth has been better than Google's 1st party hardware growth?
    netmagewatto_cobra
  • Reply 11 of 28
    lkrupplkrupp Posts: 7,088member
    Interesting report on NBC Nightly News last night. Thousands of children’s apps in the Google Play store were found by researchers to be improperly tracking the children via GPS. Google stated that it is committed to protecting children and said it is looking into the matter. At that point I choked on my pork chop.

    https://www.nbcnews.com/tech/tech-news/thousands-android-apps-improperly-tracking-kids-data-says-study-n866711


    edited April 2018 Rayz2016tmayspinnydmatrix077watto_cobra
  • Reply 12 of 28
    lkrupplkrupp Posts: 7,088member
    Anybody notice how easy it is to predict who will come in to trash an article by DED?  :*
    StrangeDaysnetmagewatto_cobra
  • Reply 13 of 28
    avon b7avon b7 Posts: 3,796member

    but both Google and Android enthusiasts note that shopping outside of Google Play is exceptionally dangerous due to the malware and spyware that satiates open software markets.
    This is a bit like saying walking outside is dangerous. Yes, it can be, if you have must or choose to frequent dangerous areas. But the vast majority of people buying outside of the play store (in the US, as this data looks at) are giving their money to established companies like Spotify and Netflix on a desktop.

    DED, it would be interesting to see an unbiased look at the two different business models. Rather than saying Google fails at being Apple, why not look at what it is actually trying to do. Its goal is to get many devices into hands and make money from advertising in apps rather than clip the ticket on app purchases. The world is better if we have competing business models.
    Agreed. It would be better if this claim were supported with a link but even then it wouldn't hold much water:

    "Android enthusiasts note that shopping outside of Google Play is exceptionally dangerous".

    The title would be more correct if it stated this information is limited to U.S. App Store. The linked source article makes this clear:

    "U.S. iPhone Users Spent An Average of $58 on Apps in 2017, 23% More Than the Year Before"


    The numbers are estimates, not absolute numbers, and although the article states that Google Play doesn't represent the entirety of the Android App store market, no estimate is given for how much the missing part could represent. Without such an estimate, the whole idea is out of whack.

    A far better observation could be made if it were based on numbers (even estimates) worldwide.

    Last year Android App stores were on track to overtake Apple (not sure if services and subscriptions are included, though):

    "However, when factoring in Google Play and third-party Android stores combined, consumer spend should overtake iOS for the first time ever in 2017"

    https://www.appannie.com/en/insights/market-data/app-annie-forecast-2017-mobile-app-store-revenue-exceed-139-billion-2021/

    It would be more interesting to see how that eventually played out.


    edited April 2018 muthuk_vanalingam
  • Reply 14 of 28
    StrangeDaysStrangeDays Posts: 7,622member
    More estimates from analyst firms treated as news. It’s not news and it’s not rumors it’s just noise. Does DED ever get tired of the company X sucks because it’s not Apple/doesn’t have Apple’s business model theme?
    Do you ever get tired of getting butthurt every time DED points out why Apple is not failing and is in fact thriving? It’s practically knee jerk — DED uses reason to prove what should be obvious anyway, and people come whining out of the woodwork when their narrative is broken.
    netmagetmayspinnydwatto_cobra
  • Reply 15 of 28
    StrangeDaysStrangeDays Posts: 7,622member

    cropr said:

    In mobile, people do not search Google so much. They go use dedicated apps. And nobody playing a game cares about banner ads. There’s little real value in in app ads.
    Nonsense.  If this were true, Google would not pay Apple that much for being the preferred search engine in mobile Safari.
    Safari isn’t what’s meant by “app ads”. Safari is probably the last place google can hope to generate significant revenue in mobile...ads in apps just aren’t as valuable as ads on desktop browsers. And since mobile is app-dominant, that’s a problem for google. 
    tmaywatto_cobra
  • Reply 16 of 28
    This article is helpful for refuting pay-for-play "journalism", but a better comparison between the two companies is to point out that Apple has three significant revenue streams:
    #1 Hardware
    #2 Services, aka, taking a cut on stuff (app sales, music sales, etc)
    #3 Metadata

    Google doesn't have #1 (hardware) in a meaningful way, their #2 (services) is search, and they're in a web-tracker/cookie war for #3 (metadata) with facebook, and all the other trackers. 

    Metadata is becoming more valuable than search or services-related data because of a) privacy laws like the EU's, but also because b) metadata is typically not considered to be about the person (eg, in the US, law enforcement doesn't need a search warrant to collect "pin registry" info like every phone number you dial, the IPs/websites you visit, certain info shared with a cell tower like your phone's location, etc).  Apple can block web trackers - and doesn't need its own web trackers - because the hardware is the tracker. The data doesn't need to be personally linked to a particular device or individual - it's better for obeying privacy laws and avoiding corporate liability if it doesn't - because the metadata can be aggregated (literally, everything "a device" (not a person) does and goes to, merged with other devices on a shared device ID) into an impersonal (not personally identifiable, nudgenudgewinkwink) profile that is then marketable to sellers (not selling personal data, selling access to groups of metadata regarding devices... which are really individual people if you do any significant re-identifying legwork but laws are dumb and that's how the laws currently work in the USA. 

    EU is much more restrictive with their new privacy law, but there still is a "this isn't personal info, it's 'just' metadata" line where it is possible to make lots of $$$ without all the compliance headaches. The rest of the world is the wild west; no laws or arbitrarily enforced ones, on privacy. Google will always (always?) have search-ad revenue, but without a deep well of metadata it's little more than clickable banners shot into the dark.  Long term that's problematic for Google, they know it, and they're trying to use hardware and trackers to address the issue.  Facebook is, too.  etc. And Apple's trying to block web trackers because it's in their interest to do so.  And here we are.
    avon b7watto_cobra
  • Reply 17 of 28
    Rayz2016Rayz2016 Posts: 4,603member
    More estimates from analyst firms treated as news. It’s not news and it’s not rumors it’s just noise. Does DED ever get tired of the company X sucks because it’s not Apple/doesn’t have Apple’s business model theme?
    I’d get some Preparation H on that if I were you…
    lkrupptmayStrangeDayswatto_cobra
  • Reply 18 of 28
    jbdragonjbdragon Posts: 2,119member
    cropr said:

    In mobile, people do not search Google so much. They go use dedicated apps. And nobody playing a game cares about banner ads. There’s little real value in in app ads.
    Nonsense.  If this were true, Google would not pay Apple that much for being the preferred search engine in mobile Safari.


    Quote "Mobile ads pay far less than display ads on PC, and display ads are generally not very valuable anyway. Google’s main revenue source was never generic ad banners but paid placement of advertising next to search results."

    This is why Google pays Apple a bundle to be the default search on iOS. Which you failed to quote. The money they are making the most from is PAID PLACEMENT of Advertising next to search results!!!! For Example, go to Google Search and enter "Apple Watch". What do you get? First thing I get is a Shop for Apple Watch section showing me the Watch in a number of stores and the prices. Followed by a couple more PAID Links that show (AD in a box) one of them is Apple. So it seems Apple is also paying Google to be the top search result when someone does a Apple type search.

    This is the main way Google makes most of their money. You need to scroll past that crap to see the results of what you really want. Myself, I switched my default to DuckDuckGo as you get much less of that crap.
    watto_cobra
  • Reply 19 of 28

    but both Google and Android enthusiasts note that shopping outside of Google Play is exceptionally dangerous due to the malware and spyware that satiates open software markets.
    This is a bit like saying walking outside is dangerous. Yes, it can be, if you have must or choose to frequent dangerous areas. But the vast majority of people buying outside of the play store (in the US, as this data looks at) are giving their money to established companies like Spotify and Netflix on a desktop.

    DED, it would be interesting to see an unbiased look at the two different business models. Rather than saying Google fails at being Apple, why not look at what it is actually trying to do. Its goal is to get many devices into hands and make money from advertising in apps rather than clip the ticket on app purchases. The world is better if we have competing business models.
    So no, Gools has not just been focused on mobile ads. And it hasn’t even performed well in mobile ads. 

    Hasn't performed well in mobile ads? It's the global leader in mobile ads and it makes up the bulk of its revenue.


    but both Google and Android enthusiasts note that shopping outside of Google Play is exceptionally dangerous due to the malware and spyware that satiates open software markets.
    This is a bit like saying walking outside is dangerous. Yes, it can be, if you have must or choose to frequent dangerous areas. But the vast majority of people buying outside of the play store (in the US, as this data looks at) are giving their money to established companies like Spotify and Netflix on a desktop.

    DED, it would be interesting to see an unbiased look at the two different business models. Rather than saying Google fails at being Apple, why not look at what it is actually trying to do. Its goal is to get many devices into hands and make money from advertising in apps rather than clip the ticket on app purchases. The world is better if we have competing business models.

    In mobile, people do not search Google so much. They go use dedicated apps. And nobody playing a game cares about banner ads. There’s little real value in in app ads. 

    No value in in-app ads? Youtube? Maps? Gmail? Chrome? Waze? You know, five of the most popular apps on the iPhone. This is where Google is making tens of billions of dollars.
    singularity
  • Reply 20 of 28
    avon b7 said:

    but both Google and Android enthusiasts note that shopping outside of Google Play is exceptionally dangerous due to the malware and spyware that satiates open software markets.
    This is a bit like saying walking outside is dangerous. Yes, it can be, if you have must or choose to frequent dangerous areas. But the vast majority of people buying outside of the play store (in the US, as this data looks at) are giving their money to established companies like Spotify and Netflix on a desktop.

    DED, it would be interesting to see an unbiased look at the two different business models. Rather than saying Google fails at being Apple, why not look at what it is actually trying to do. Its goal is to get many devices into hands and make money from advertising in apps rather than clip the ticket on app purchases. The world is better if we have competing business models.
    Agreed. It would be better if this claim were supported with a link but even then it wouldn't hold much water:

    "Android enthusiasts note that shopping outside of Google Play is exceptionally dangerous".

    The title would be more correct if it stated this information is limited to U.S. App Store. The linked source article makes this clear:

    "U.S. iPhone Users Spent An Average of $58 on Apps in 2017, 23% More Than the Year Before"


    The numbers are estimates, not absolute numbers, and although the article states that Google Play doesn't represent the entirety of the Android App store market, no estimate is given for how much the missing part could represent. Without such an estimate, the whole idea is out of whack.

    A far better observation could be made if it were based on numbers (even estimates) worldwide.

    Last year Android App stores were on track to overtake Apple (not sure if services and subscriptions are included, though):

    "However, when factoring in Google Play and third-party Android stores combined, consumer spend should overtake iOS for the first time ever in 2017"

    https://www.appannie.com/en/insights/market-data/app-annie-forecast-2017-mobile-app-store-revenue-exceed-139-billion-2021/

    It would be more interesting to see how that eventually played out.


    So google loses, which happens a lot when compared to Apple, and now we need to expand the conversation in such a way that they maybe don't come up short. DED can't write an article to your satisfaction because you will insist on moving the goal posts. Since better observations are made by estimating, I can estimate Apple sells more ads than Google. Doesn't make it true, but numbers don't matter right.
    watto_cobra
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