Apple leads Android by 1200% in apps revenue

By on November 22, 2011, 6:00 PM

While Android has almost caught up to iOS in the race for apps, Apple is still far ahead of Google when it comes to revenue generated by those apps. The numbers for this revelation come from Piper Jaffray analyst Gene Munster and suggests that Android users are conservative when it comes to shopping on the Android Market.

The analysis shows that Android owners tend to shy away from purchasing commercial apps, at least in comparison to iPhone and iPad users who purchased about 12 times more paid apps per device. A substantial 13.5 percent of iOS customers purchase apps while only 1.3 percent of Android users even bother with non-free software on their devices.

So, how much revenue are we talking about? The Android market generated just under $350 million in gross revenue while Apple's App Store raked in nearly $5 billion. It would appear that selling apps has turned out to be quite a lucrative enterprise, since both companies received 30% of those totals.

For its comparatively poor performance, Munster blames Android Market shoppers for choosing free apps over commercial apps. However, Android users are not total cheapskates. The ASP for Android Market was $3.79 versus $2.01 for the App Store. That means the average amount paid for non-free apps on Android is nearly double that of iOS. This suggests a few possibilities, one of which may well be that Android users are more willing to pay big bucks when they do discover apps compelling enough to pay for.

In the report, Gene Munster mentions that, "Google has closed the gap in terms of app dollars spent over the past year" and the analyst believes, "Android will grow smartphone share faster than Apple". Munster also predicts that Android should catch up to iOS in about three to four years if current trends continue.

User Comments: 21

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spydercanopus spydercanopus said:

That's because they have better games. I'm willing to spend $15 on Final Fantasy Tactics on iOS. I'd also be willing to pirate it on andriod.

Guest said:

this is actually a darn shame!

android is so much more open, with literally NO restrictions, and its still hard to find quality apps.

I think it's because when a developer makes a game for android, it must work on ALL of the android phones, and if it doesn't the app makers get flamed, so my guess is they dont think its worth the trouble.

Guest said:

Well Duh! Wonder if the fact that most Android apps are free has anything to do with it?

inventix1136 said:

One of the ways that Apple allows is for in-app purchases for otherwise free applications. This means that the user actually did not pay anything for the actual application but once hooked, they paid for some upgrades in the game. So if we break out the in-app purchases vs. actual application purchases, we will find that the numbers are probably almost equal. Most people would rather not pay for an application but would not bat an eye for an in-app purchase to get something additional.

Personally, I REALLY hate in-app purchases -- especially given that my iPad has been "donated" to my kids and they are constantly asking for an upgrade or two (the answer is always no). Me, I am running on my Acer Iconia A500 Android and could not be happier.

Wendig0 Wendig0, TechSpot Paladin, said:

Right now it is difficult finding well made apps for honeycomb tablets. There just aren't many out there yet. Hopefully ICS will bring in more, better quality apps.

By the way, you can pre-order the Transformer Prime on Amazon now. I pre-ordered mine this afternoon.

Guest said:

Someone in this note forgot about Google's ads. It's straightforward tactic and a different business model than Apple :P I am pretty sure that Goggle ads revenue surpasses any apps store income greatly!

Mindwraith said:

imo, phone apps are one of the most stupid things you could waste your money on

the phones themselves are already over priced with crappy 1940's audio quality

Burty117 Burty117, TechSpot Chancellor, said:

Mindwraith said:

imo, phone apps are one of the most stupid things you could waste your money on

the phones themselves are already over priced with crappy 1940's audio quality

ok? This is a little confusing? 1940's audio quality? no offence but when I download a track from iTunes and play it back on my 4s through my Ultimate Ears Headphones i'm pretty sure nothing in the 1940's can even get near the sound quality?

Also why is it the most stupid thing you have EVER HEARD?

I bought the TomTom Europe app for my iPhone, cost me £45, a cheap TomTom with less functionality would cost over twice that? I have used it (and now can't live without it) for over a year now with no issues.

Explain what is so stupid buying apps?

Kibaruk Kibaruk, TechSpot Paladin, said:

Mindwraith said:

imo, phone apps are one of the most stupid things you could waste your money on

the phones themselves are already over priced with crappy 1940's audio quality

This guy has an old phone that can barely read java apps and has absolutely NO idea on what nowadays aplications in your phone can do.

If that guy meant it in the way that you can always get an alternative for free maybe he could be somewhat right, developers strip functions to their free or light apps, since he was talking about overpriced with crappy audio quality I doubt it very much, get a portable record player and hate some more.

isamuelson isamuelson said:

Hey, I've purchased quite a lot of apps for my Droid when they're worth it. But, there are many others I have that are free (with ads). So, revenue is earned via the ads.

Also, with Amazon app store having a "free app of the day", I've gotten a lot of apps that way. But even with that, I still purchase apps when I feel they are worth the price.

Guest said:

What about google's ad revenue from the apps?

Guest said:

I like the quality of the Apps on the iPhone. I think Google could/should do something similar by reviewing all apps as this helps weed out junk and viruses and it could still be open. Being too open can be problematic. I'll stick with my very functional closed iPhone. I really use to think this was bad till I got one. I see no problems in this closed system as I can get whatever I want. No I don't like itunes but I guess it works OK when I purchased a few Apps myself. Never thought I would but some of these apps are really cool.

Guest said:

What is the average "Income" for top, middle, low developers ?

Are the millions developers making monies ?

MilwaukeeMike said:

These discussions always bother me. Does anyone have BOTH an iPhone and an Android phone? No, so there are no real valid comparisons.

I was surprised at the average price for an Apple app is $2. Most non-free android apps I've seen are $5. Are the apple apps $1 each normally?

And why are people defending Google for making less money. As an android user, i'm getting most of my apps for free. I'd like to see Percentage of apps on your phone that were free. Cause about 90% of the apps on my phone were.

Guest said:

cuz in android there is always a free alternative of wataver app u need..

motrin said:

in. the past month I have purchased $15 width of apps on my x2. mostly emulators tho..

the user above me, mentioned amazon app. I also recommend 'Getjar' lots of apps are given away got free

k9182000 said:

Doesn't dev's have to pay a $99 fee to sell their apps on the istore, even if it's a free app. I wonder how much of the 5B is from that.

lipe123 said:

Wow really?

Android has almost everything you could ever need for free, so yea of course the apple apps generate more income cos they are greedy mofos that dont have any good free stuff.

If anything these figures just means android is the better platform for the end users. Want to spend 1200% more to get the same apps?

caravel said:

cuz in android there is always a free alternative of wataver app u need..

Such as... for example... a free spell checker?

Guest said:

i like both of them.

Guest said:

Yeah. Giving away everything for free has just been such a fantastic and stable business model through history. And also something that guarantees quality and great support! There are just millions of eager developers out there who are willing to spend hundreds of hours of hard work without ever making a dime. Maybe they all live in their moms basement?

Since its such a great businessmodel I wonder when the first free cars come to market?

BTW Google still makes over 60% of their (comparatively small) mobile search revenue from iOS. I guess that means that a lot of Android the customers seem to be oblivious to the fact that they can do other things with their smart phones besides call and send text messages. Or?

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