Google Play downloads are growing, but Apple's App Store commands 70% of revenue

Posted:
in iPhone edited January 2015
Downloads still aren't translating to dollars for Google and developers who create applications for its Play store for Android devices, as Apple's iOS App Store remains far and away the most profitable digital storefront, according to the latest data.




New figures from mobile analytics firm App Annie published on Wednesday show that in 2014, Google Play had 60 percent more worldwide application downloads than Apple's iOS.

In terms of monetization, however, it's a very different story: The iOS App Store generated over 70 percent more yearly app revenue than the Google Play Store.

That's not because Google Play revenue didn't grow last year, either. Both stores posted strong revenue growth in 2014, but Apple's growth was on pace with its competitor, allowing it to maintain a significant lead in terms of dollars spent.

The new data comes after a record year for the App Store, in which developers generated over $10 billion in revenue. That's nearly half of the $25 billion developers have earned to date from the iOS App Store, showing that revenue is only accelerating on the digital storefront for iPhone and iPad.

And 2015 is off to an even better start, as Apple revealed earlier this month that New Years Day was the single biggest day ever in App Store history. In addition, the first week of January set a new record for billings from the App Store, with customers spending nearly a half-billion dollars on apps and in-app purchases.




As for exactly what users are downloading, App Annie's data shows that mobile games generally skew toward male users, while females are more interested in social networking and photo and video apps.

Most of the revenue on the iOS App Store and Google Play comes from a trio of nations that App Annie calls the "app store superpowers": Japan, South Korea, and the United States. Together, these three countries generated more revenue in 2014 than the rest of the world combined, the firm's data shows.

App Annie's data comes from analytics featured in software from over 90 percent of the top 100 publishers, and more than 700,000 applications.
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Comments

  • Reply 1 of 29
    lkrupplkrupp Posts: 7,463member

    This appears to be just an extension of the market share argument made by fAndroids. They can claim the numbers but Apple makes all the profit. I still don’t fully understand the surveys that show Android users are basically cheapskates that don’t spend money on apps, don’t browse the web, and just don’t seem to use their devices for anything other than making phone calls.

  • Reply 2 of 29
    calicali Posts: 3,495member
    The problem with both stores is that content is pretty much cross platform.

    Apple needs exclusive content.

    I would like to see them buy a game studio or cut exclusive deals with Disney.

    Maybe Jimmy and Dre can get exclusive music on iTunes also.
  • Reply 3 of 29
    jbdragonjbdragon Posts: 2,189member
    Quote:

    Originally Posted by cali View Post



    The problem with both stores is that content is pretty much cross platform.



    Apple needs exclusive content.



    I would like to see them buy a game studio or cut exclusive deals with Disney.



    Maybe Jimmy and Dre can get exclusive music on iTunes also.

     

    I don't know,... There's a lot of games that are iOS only.  

  • Reply 4 of 29
    rob53rob53 Posts: 2,105member
    Quote:

    Originally Posted by lkrupp View Post

     

    This appears to be just an extension of the market share argument made by fAndroids. They can claim the numbers but Apple makes all the profit. I still don’t fully understand the surveys that show Android users are basically cheapskates that don’t spend money on apps, don’t browse the web, and just don’t seem to use their devices for anything other than making phone calls.


    Aren't the majority of Android-based cell phones glamorized feature phones anyway that can't do much more than make calls? I would like to see what Google apps are actually downloaded, categorize them, and evaluate what level of phone they require. I would guess the majority of downloaded Google apps work on the simplest of phones, which is obvious, but that a whole lot less are actually written and downloaded for the better Android phones (whatever those are). It's always been my feeling that since Android is free, Android users don't want to pay for apps and really don't want to pay for phones. It's the typical linux world of everything should be free.

  • Reply 5 of 29
    This proves the iOS ecosystem is very strong. Tim Cook said the key reason that Apple lost the personal computer market to Microsoft in the 80s/90s was that consumers went where the software was. Only creative pro software (Aldus, Adobe, etc) had a stronghold on Macs, which remained popular among creative professionals during those dark days, and they kept Apple in business. Cook views a strong app ecosystem as strategically vital, and the reason why the iPhone isn't going to be a repeat of what happened when Apple launched the Mac.

    The theory that app developers write for the biggest platform has some truth to it, but there were developers like John Carmack who said Android wasn't convincingly profitable, and that it required more overhead during development to test and tune for wide variations in hardware specs, enough so that they focused their efforts on iOS first.
  • Reply 6 of 29
    auxioauxio Posts: 2,035member
    Quote:

    Originally Posted by lkrupp View Post

     

    I still don’t fully understand the surveys that show Android users are basically cheapskates that don’t spend money on apps, don’t browse the web, and just don’t seem to use their devices for anything other than making phone calls.


     

    That data likely comes from the low-end Android phone users -- the ones who chose the $0 Android phone (purely because of price) and would likely choose a feature phone if it was cheaper in some way.  They really don't care what type of phone they get, just as long as they can use it for talk and text.

     

    What would be more interesting is if you compared the high-end Android phone users to iPhone users.  Do they spend as much on apps and use the web just as much?  I'm thinking it would be a lot more comparable.

     

    Just goes to show that market share means nothing if the phones are selling at near-zero profit (or as loss leaders) and the users don't pay for any content.  The only people making any money at that point are the carriers (on the contract).

  • Reply 7 of 29
    cali wrote: »
    The problem with both stores is that content is pretty much cross platform.

    Apple needs exclusive content.

    Yeah, why did Apple release Garage Band for Android?
  • Reply 8 of 29
    gwydiongwydion Posts: 1,076member
    Quote:

    Originally Posted by rob53 View Post

     

    Aren't the majority of Android-based cell phones glamorized feature phones anyway that can't do much more than make calls?


     

    No, any smartphone that has Google Play has to pass a certification. 

  • Reply 9 of 29
    croprcropr Posts: 966member

    As an app developer I have no income from Apple or Google,  I find their 30 % margin unacceptably high.  I am either paid by a 3rd party who gives me an order to develop an app for them, or I include a payment gateway that charges me around 3 % commission.  I have currently 1 app using a payment gateway (a second is being built) and the income I get from Android devices is slightly bigger than from iOS devices. 

  • Reply 10 of 29
    calicali Posts: 3,495member
    Yeah, why did Apple release Garage Band for Android?

    "Pretty much cross platform"
    Is what I said.

    No shit there's exclusive content on both platforms.

    But a lot of Android users won't buy an iPhone because they believe its "the same thing".

    You can't convince these guys to buy an iPhone for Garage Band.

    Apple needs an exclusive game as big as Angry Birds or a movie as big as Spider-Man.

    Heck they really need to overhaul their whole content store.
  • Reply 11 of 29
    lkrupp wrote: »
    <p>This appears to be just an extension of the market share argument made by fAndroids. They can claim the numbers but Apple makes all the profit. I still don’t fully understand the surveys that show Android users are basically cheapskates that don’t spend money on apps, don’t browse the web, and just don’t seem to use their devices for anything other than making phone calls.</p>
    You do have to take into account that app Annie doesn't take into account apps that use ads to generate income.

    For my Android and Apple devices my usage pattern (I'm not saying it's representative of other people who use Android or Apple devices) is almost wholey within Apps.
    Whether it's games or news etc it's almost all through apps. The browser Apps are some of the least used.
  • Reply 12 of 29
    cyniccynic Posts: 124member
    Quote:
    Originally Posted by cropr View Post

     

    As an app developer I have no income from Apple or Google,  I find their 30 % margin unacceptably high.  I am either paid by a 3rd party who gives me an order to develop an app for them, or I include a payment gateway that charges me around 3 % commission.  I have currently 1 app using a payment gateway (a second is being built) and the income I get from Android devices is slightly bigger than from iOS devices. 




    Thanks for sharing this.

     

    I am not exactly sure how you distribute your apps on the App Store, apparently using a third party payment gateway. It would however explain, why the Android revenue is higher, since iOS users are used to and love the convenience of the App Store. Convincing them to somehow register and pay through a third party in order to unlock something would be a pretty hard sell.

     

    Regarding those 30%, you need to consider the benefits of being exposed on the App Store and what this does for your visibility. Sure, you might say it is cheaper and easier to distribute software through your own website, using some credit card processing partner. That is all nice and fine, however, might only be accurate for big names that already have a loyal and active following. And then there are still big names, such as Pixelmator that reported huge growth from starting to sell on the MAS alone.

     

    If you are an unknown indie however, trying to get by, or trying to get known, I'm sure those 30% are more then worth it for the visibility and exposure you get.

     

    This is similar to the old days, where your software was either in some store shelf or it wasn't. This would make or break you. And trust me, your income from boxed software on such a shelf was a tiny fraction of those 70% you get nowadays. ;-)

  • Reply 13 of 29
    rob53rob53 Posts: 2,105member
    Quote:

    Originally Posted by Gwydion View Post

     

     

    No, any smartphone that has Google Play has to pass a certification. 


    I found this site, https://developer.android.com/distribute/tools/launch-checklist.html, that's a checklist for apps but when I look for certification, I only find people certification, not app certification. The app checklist looks like it's up to the programmer to do everything, which doesn't always mean they will do everything correctly. I also don't see anything that talks about an independent review of the app, which is what Apple does before allowing any app to be published. Please point me to where it says each app has to pass a certification process performed by someone other than the programmer. Thanks.

  • Reply 14 of 29
    cropr wrote: »
    As an app developer I have no income from Apple or Google,  I find their 30 % margin unacceptably high.  I am either paid by a 3rd party who gives me an order to develop an app for them, or I include a payment gateway that charges me around 3 % commission.  I have currently 1 app using a payment gateway (a second is being built) and the income I get from Android devices is slightly bigger than from iOS devices. 

    What is your app?
  • Reply 15 of 29
    froodfrood Posts: 771member
    Quote:

    Originally Posted by lkrupp View Post

     

    This appears to be just an extension of the market share argument made by fAndroids. They can claim the numbers but Apple makes all the profit. I still don’t fully understand the surveys that show Android users are basically cheapskates that don’t spend money on apps, don’t browse the web, and just don’t seem to use their devices for anything other than making phone calls.


     

    Apple is going to be the profit king for quite a while to come.  The data hardly shows Android as a nobody though, and they've made considerable gains.  This year Android did about what Apple did last year.  I wouldn't call that peanuts.  Last year Apple pulled in more than double what Android did, this year they only made about 50% more.

     

    What is great for both is that in one year they went from @$150 mil in sales to @$250 mil.  Should be interesting to see if China starts registering on the app scale.

  • Reply 16 of 29
    tenlytenly Posts: 709member
    What is your app?

    Haha! I'll bet he doesn't reply! Or if he does, the truth won't match his claims! Sounds very troll-ish to me...
  • Reply 17 of 29
    gwydiongwydion Posts: 1,076member
    Quote:

    Originally Posted by rob53 View Post

     

    I found this site, https://developer.android.com/distribute/tools/launch-checklist.html, that's a checklist for apps but when I look for certification, I only find people certification, not app certification. The app checklist looks like it's up to the programmer to do everything, which doesn't always mean they will do everything correctly. I also don't see anything that talks about an independent review of the app, which is what Apple does before allowing any app to be published. Please point me to where it says each app has to pass a certification process performed by someone other than the programmer. Thanks.


     I did not said app certification, I said smartphone certification

  • Reply 18 of 29
    auxioauxio Posts: 2,035member
    Quote:
    Originally Posted by cali View Post



    But a lot of Android users won't buy an iPhone because they believe its "the same thing".



    You can't convince these guys to buy an iPhone for Garage Band.

     

    From my experience, most of the people who pick an Android phone over an iPhone fall into these categories:

     


    • Want the cheapest handset possible.  Apple is never going to win these people over, and really, why should they bother?  There is no profit margin for hardware on the low end, and these people are likely never going to spend enough on content to make it worthwhile to sell at a loss to win them over anyways.

    • The tech crowd that wants to tinker with their devices beyond what Apple allows (and tend to be open source zealots).  These people are buying the high end handsets (typically Google Nexus and similar), but are a small percentage of the overall market (as we can see from Google device sales).  It's very difficult to make a handset that works well for both people who just want ease of use and don't care about technical details and the technical crowd that wants to tinker.  Apple chose to go for the ease of use market, which is far more lucrative.

    • The people who simply want to be different from everyone else and/or have irrational hatred of large companies like Apple (but yet not Samsung for reasons only known to them).  Not much you can do here.  They're not looking at the exclusive content they can get for each device, they just want to choose anything but Apple.

     

    Perhaps some exclusive content may win over some of the crowd in the 3rd category if they can get past their personal hangups, but I don't think it warrants the investment expense.

  • Reply 19 of 29
    gwydiongwydion Posts: 1,076member
    Quote:

    Originally Posted by auxio View Post

     

     

    From my experience, most of the people who pick an Android phone over an iPhone fall into these categories:

     


    • Want the cheapest handset possible.  Apple is never going to win these people over, and really, why should they bother?  There is no profit margin for hardware on the low end, and these people are likely never going to spend enough on content to make it worthwhile to sell at a loss to win them over anyways.

    • The tech crowd that wants to tinker with their devices beyond what Apple allows (and tend to be open source zealots).  These people are buying the high end handsets (typically Google Nexus and similar), but are a small percentage of the overall market (as we can see from Google device sales).  It's very difficult to make a handset that works well for both people who just want ease of use and don't care about technical details and the technical crowd that wants to tinker.  Apple chose to go for the ease of use market, which is far more lucrative.

    • The people who simply want to be different from everyone else and/or have irrational hatred of large companies like Apple.  Not much you can do here.  They're not looking at the exclusive content they can get for each device, they just want to choose anything but Apple.

     

    Perhaps some exclusive content may win over some of the crowd in the 3rd category if they can get past their personal hangups, but I don't think it warrants the investment expense.


     

    Another one:

     


    • People that want an smartphone that cover its needs and all three major systems are good enough right now .

  • Reply 20 of 29
    gwydion wrote: »
    <div class="quote-container" data-huddler-embed="/t/184549/google-play-downloads-are-growing-but-apples-app-store-commands-70-of-revenue#post_2667896" data-huddler-embed-placeholder="false">Quote:<div class="quote-block">Originally Posted by <strong>auxio</strong> <a href="/t/184549/google-play-downloads-are-growing-but-apples-app-store-commands-70-of-revenue#post_2667896"><img alt="View Post" src="/img/forum/go_quote.gif" /></a><br /> <p> </p><p>From my experience, most of the people who pick an Android phone over an iPhone fall into these categories:</p><p> </p><ul> <li>Want the cheapest handset possible.  Apple is never going to win these people over, and really, why should they bother?  There is no profit margin for hardware on the low end, and these people are likely never going to spend enough on content to make it worthwhile to sell at a loss to win them over anyways.</li> <li>The tech crowd that wants to tinker with their devices beyond what Apple allows (and tend to be open source zealots).  These people are buying the high end handsets (typically Google Nexus and similar), but are a small percentage of the overall market (as we can see from Google device sales).  It's very difficult to make a handset that works well for both people who just want ease of use and don't care about technical details and the technical crowd that wants to tinker.  Apple chose to go for the ease of use market, which is far more lucrative.</li> <li>The people who simply want to be different from everyone else and/or have irrational hatred of large companies like Apple.  Not much you can do here.  They're not looking at the exclusive content they can get for each device, they just want to choose anything but Apple.</li></ul><p> </p><p>Perhaps some exclusive content may win over some of the crowd in the 3rd category if they can get past their personal hangups, but I don't think it warrants the investment expense.</p></div></div><p> </p><p>Another one:</p><p> </p><ul style="color:rgb(0, 0, 0)"> <li>People that want an smartphone that cover its needs and all three major systems are good enough right now .</li></ul>
    Look stop trying to put some common sense, the yokels won't like it!
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