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Android Starting to Pull Past iOS in Generating Revenue for App Developers

Two studies show the Android ecosystem is now creating more money for developers than the one around the iPhone.

Photo Illustration by Tyler Pina

For several years now, Apple has had the edge in attracting apps over Google. Android phones are greater in number than iPhones, but developers have continued to favor the iPhone because their owners tend to spend more money. In addition, each iPhone user is far more attractive to advertisers than an Android one.

But now quantity is giving Google a boost. The massive number of Android devices is finally starting to make Android a more significant revenue generator than the iPhone. Each individual iPhone is still more lucrative than a single Android device for app makers, but the overall size of the Android market is starting to be large enough to overcome the per-device difference.

Two recent studies suggest the Android ecosystem has started to overtake the one surrounding the iPhone. Opera Mediaworks, for example, found that in the first quarter Android generated 45.8 percent of ad revenue compared with 45.4 percent for iOS — the first time Google outperformed Apple.

Digi-Capital, meanwhile, says that when China is included, Android stores generated more revenue overall than Apple’s App Store last year.

“Accepted wisdom and research tells us that iOS makes more money than Google Play, despite Google Play having more downloads,” Digi-Capital’s Tim Merel said in a report. “Nobody would argue with that. But what about iOS vs Android at a global level? Include the massive Chinese Android app stores, and Android didn’t just dominate download volumes, it made more money than iOS last year.”

Whether it is this quarter or last year or even next year, it is clear that the Android universe is on a pace to dwarf the one around the iPhone due to sheer numbers. Apple remains ensconced at the high end of the market, while much of the global growth is in affordable smartphones — often ones selling for $150 or less without a subsidy.

Google is working to curb the fragmentation in Android, particularly across Asia, to better collect data and revenue. It’s also trying to lure more developers to build for the Play store. Several new features will land later this month at its developer conference, according to someone familiar with the company.

And Android’s market share gains are continuing. In last year’s fourth quarter, Android accounted for more than three quarters of all smartphones, compared with just under 20 percent for iOS, according to IDC.

A big part of Apple’s sway with developers has been the fact that those who own iPhones tend to spend more on apps and also represent the demographics most attractive to advertisers. That is likely to remain true, even as Android’s numbers swell. However, the new studies suggest that Apple has probably peaked in terms of commanding the lion’s share of app dollars and is likely to represent a smaller share going forward.

“Considering the major volume advantage of Android, outside the U.S. in particular, this milestone was inevitable,” says Accel Partners’ Rich Wong, long a backer of Android. “While Apple deserves enormous credit for some recent market share resurgence (in the U.S. in particular), the longer-term trend hasn’t changed. Developers ultimately have to go where the eyeballs are, and for global mobile eyeballs, Android is way out in front.”

Wong said that the trend is starting to show up in where developers go first with their apps. “Just three years ago, most mobile devs would definitely prototype on iOS first, now I would say its a tossup, and outside the First World markets, Android often wins the tossup.”

Opera Mediaworks

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