Android phones may outsell the iPhone worldwide, but iPhone developers make more money.
According to data released during its I/O Developers Conference, Google paid developers $5 billion in the last 12 months, and just $2 billion the 12 months before that. However, according to Benedict Evans, who works for venture capitalist firm Andreessen Horowitz, Apple paid out $7 billion to developers in the same 12 months.
Evans believes that this is due to two different, and possibly self-fulfilling reasons. First, Evans says that iPhone owners are more likely to spend money on apps, rather than skirt paid content for free ad-supported apps.
“Android phones average $250-$300 where iPhones average $600,” Evans points out. “People who choose to spend the extra money are sending a signal about their intents.”
The iPhone 5s and the Samsung Galaxy S5 are comparable smartphones and probably have a similar average revenue per user (ARPU), says Evans, “but Galaxy S5 users are a small minority of Android users.”
The second reason is that that developers see lower revenue from the Google Play Store, they instill that mindset and automatically develop apps with ad-supported revenue streams in lieu of paid apps.
“This can become circular,” Evans said, “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.”
Evans' insights mirror those of IBM. In late December, IBM put out ecommerce numbers that they saw during Christmas.
“As a percentage of total online sales, iOS was more than five times higher than Android, driving 23 percent vs. 4.6 percent for Android,” stated an IBM press release. “On average, iOS users spent $93.94 per order, nearly twice that of Android users, who spent $48.10 per order.”
Business Insider reported at the time, “the debate around iOS and Android market share matters because historically, developers have gravitated to one platform and prioritized their efforts for that platform. The platform that typically wins has the most users.”
But while the Google’s revenue may be less than Apple’s, it’s not by much, which may indicate Apple’s power over developers is waning. Ultimately, both Google and Apple have successful app stores, but Android does outsell in handsets. Whether Google can close the gap in app revenue has yet to be determined.