Published on GoMo News, November 30
In a recent article that quoted research by Piper Jaffray, it said Android developers are getting just 7% of the revenue that Apple iOS developers are getting. The article’s premise was that developers will obviously go where the money is, so therefore, Android will continue to struggle from a development perspective. This got me really thinking … could this be right? Then who are all the developers on our network?
It really is amazing what you can do with statistics.
Firstly, this statistic is relating to revenue earned from the sale of apps – not including ad revenue. Secondly, it is using revenue numbers from the life of the App Store which has obviously been around a lot longer and is much further up the hockey stick growth than Android.
Some more stats to confuse the issue.
According to research by inneractive, click-through-rates (CTR) are more than double on iOS, but eCPM are only 30% higher. This would indicate that Android developers are getting more bang for each click. Now combine this with another recent statistic that Android generates twice the ad impressions of iOS and you have Android earning more in real $ terms from Ad revenue.
“Lies, damned lies, and statistics.”
So, perhaps a more considered approach is required.
Apple has built a closed ecosystem. They heavily regulate the app store and do not look favourably on revenue generated outside of this environment. Ad revenue is the major hole in their “atmosphere”. They cannot, for obvious reasons, close the hole. They have tried to be part of the leakage through iAds. Given their current mindset, it is in their interest to control this outflow from their incredibly full bucket.
On the other side you have Android. Open source, open environment, open market. Added to the mix is that Google, the developers of the Android platform, are an Advertising company. Wouldn’t it be in their interest to ensure the ad revenue floodgates open as wide as possible?
The last piece in this puzzle is to look at monetization trends. Almost 90% of all apps that are downloaded are free and involve no in-app monetization. In fact, according to Distimo, growth in the top paid apps for the 12 months to July was only 7% compared to 34% for the top free apps. Apple’s recorded revenue comes from a slowing trend for paid apps, while 72% of their revenue is from the 4% of apps with in-app purchase models (nb. in-app purchases where only introduced to Android Market in March).
While Apple continues to limit revenue outside of their eco-system, the continuing proliferation of smartphones (at increasingly lower prices) and therefore the increasing number of app users who will not pay for that usage, means that Apple apps will be forgoing a growing monetization segment. In contrast, Android’s open environment, and the ability for developers to utilise premium ad methods may mean that Android developers are in fact following the money!