Android Threatens Another of Apple’s Long-Held Superiorities

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Apple’s iOS has traditionally held an edge over Google’s Android in attracting high-quality apps and the developers who create them. While the number of users who own Android-powered smartphones outnumber those who use Apple’s iPhones, developers have found Apple’s platform to be more lucrative. Its users tend to spend more money on apps and in-app purchases, and an individual iPhone user is more attractive to advertisers than his or her Android counterpart.

But Re/code’s Ina Fried and Mark Bergen report that quantity is starting to give Android a boost. In the fourth quarter of last year, Android accounted for three-quarters of all smartphones, compared with just under 20% for iOS. The sheer number of Android devices proliferating around the world is beginning to make Android a more significant revenue generator for developers than the iPhone. While each individual iPhone is still more lucrative than an individual Android device for developers, but the vast size of the Android market is helping the operating system to overcome the difference.

Opera Mediaworks found that in the first quarter of the year, Android generated 45.8% of ad revenue, compared with 45.4% for iOS, representing the first time that Google’s platform outperformed Apple’s. And Digi-Capital says that when China is included in its data, Android app stores generated more revenue overall than Apple’s App Store did last year. Digi-Capital’s Tim Merel wrote in a report:

Accepted wisdom and research tells us that iOS makes more money than Google Play, despite Google Play having more downloads. Nobody would argue with that. But what about iOS vs Android at a global level? Include the massive Chinese Android app stores, and Android didn’t just dominate download volumes, it made more money than iOS last year.

Fried and Bergen note that the Android universe “is on a pace to dwarf the one around the iPhone due to sheer numbers.” Apple has built its market, however large, at the high end of the market, and much of the growth in the worldwide phone market centers on affordable smartphones, which are often defined as those that sell for $150 or less without a subsidy.

Google is taking steps to make Android a more attractive platform for developers, working to curb the sizable problem of fragmentation so that it and developers can better collect data and revenue, and adding features to entice more developers to build apps for the Google Play Store. Re/code reports that several new features will be introduced at the company’s developer conference later in the month.

So will the app developers who traditionally build apps for iOS first — or build apps only for iOS — begin switching to Android? A major draw of Apple’s App Store has been that its users are more willing to spend money on apps, and also represent the demographics that are most attractive to advertisers. Re/code notes that’s likely to remain true, even as more people purchase Android smartphones. But the studies suggest iOS has peaked in terms of claiming the lion’s share of app store revenues, and it is likely to see its share decline going forward.

The milestone Android achieved in surpassing iOS in app store revenue was considered by many to be inevitable, given the huge market share of Google’s platform. And because the current milestone is just the beginning of what’s expected to be a long trend, it’s going to affect the decisions made by developers. As Android grows significantly larger than iOS — not only in market share, but also in app store revenue — it seems probable that some of the developers who currently develop for iOS first and Android second will rethink the status quo.

Accel Partners’ Rich Wong told Re/code that the trend is already beginning to show in developers’ choices: “Just three years ago, most mobile devs would definitely prototype on iOS first, now I would say its a tossup, and outside the First World markets, Android often wins the tossup.”

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