Android may trump iOS in terms of market share, but when it comes to actually generating profits for developers, Apple’s mobile platform still stands supreme.
According to recently tabulated data from app store analytics firm App Annie, apps downloaded on iOS generate far more revenue than those downloaded via Google Play. What’s more, with Apple continuing to make strong inroads in China, the revenue gap between the two rival mobile platforms is increasing. All told, iOS users tend to spend up to four times as much on apps than Android users.
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This change should not be all that surprising, given that recent reports of record-breaking iPhone sales in China. In urban areas, Apple accounted for 25% of smartphone sales in Q1 2015, according to Kantar’s data. And Apple had previously said that China had accounted for $16 billion in sales in the market, while its mobile operating system grew year-over-year at the expense of Android. More importantly, perhaps, the number of first-time smartphone buyers in China who are selecting iPhone is still increasing.
The fact that iOS generates more revenue than Android is all the more impressive when one considers just how many more app downloads the Google Play store has relative to Apple’s own App Store.
Indeed, app developers for quite some time now have indicated that iOS users are more likely to purchase apps than their Android counterparts. This has real-world implications on the apps users have access to because developers with limited budgets will typically focus on developing for iOS first before turning their sites towards Android.
To date, Apple has paid out over $25 billion to iOS developers.
As to why iOS is a more lucrative platform for developers, Benedict Evans this past summer laid out 5 potential reasons:
1. Android’s market share is strongest in relatively lower-income countries
2. Many people in those countries lack credit cards and Google has been very slow to offer carrier billing
3. Android phones average $250-$300 where iPhone average $600 – people who choose to spend the extra money are sending a signal about their intents. That is, we don’t know what the ARPU for a Galaxy S5 user is, but it’s probably very similar to an iPhone user – but Galaxy S5 users are a small minority of Android users
4. Apple offers a distinctly different proposition to Android: perhaps the people who are attracted to that proposition are just more likely to spend money – that is, maybe iPhone users do spend more than GS5 users.
5. Finally, this can become circular: if developers believe that Android users do not pay, then their behavior will be affected – they may offer a free ad-supported app instead of a paid app, or have a lower price. And if they decide not to support Android or support it second, then their users will gravitate to iPhone first, which becomes self-fulfilling. You can see this clearly on Android tablets – magazine apps have low use on Android so are slow to support Android, so users who want magazine apps don’t buy Android tablets.
