Google and Apple compete over a lot of things, but one battle between the two companies that deserves more attention is their intense competition for the hearts and minds of mobile app developers. And as new analysis from Benedict Evans shows, Apple has a distinct advantage here over Google despite the fact that Android dwarfs iOS in total market share worldwide: iPhone users are much more likely to pay for apps than Android users.
“Apple told us that it paid out $7bn in calendar year 2013 — given the growth trend, it probably paid $10bn in the last 12m. On a trailing 24m basis, there were 470m iOS users in March 2014,” Evans writes. “So, Google Android users in total are spending around half as much on apps on more than twice the user base, and hence app ARPU on Android is roughly a quarter of iOS.”
Why are iOS users spending more money on apps than Android users? That’s easy: iOS users tend to have more money to spend while a big chunk of Android’s market share comes from users in emerging markets who aren’t wealthy.
This doesn’t mean that it’s not worth developing for Android, of course, since there are plenty of ways to generate money from free apps, including in-app purchases and advertising revenues. But developers who want to make solid money from direct purchases of their apps know they’re much more likely to get it through iOS, Evans writes, which gives them an incentive to develop for iOS first.