Android overtakes iOS for app downloads, but...

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Google's Android has been outstripping Apple's iOS for device sales for some time now, but the belief persists among developers that they're still much more likely to make money from iPhone and iPad apps.

The obvious conclusion to draw from a new report released by analytics firm App Annie is that they're right. A more nuanced reading, however, would conclude that there are riches to be found on both platforms. Mainly if you're making games.

The headline figures from the report: Android's Google Play store had 10% more app downloads than iOS' App Store in the second quarter of 2012, but the App Store generated 2.3x more revenues than Google Play.

There's some mathematical fun to be had with these figures. Apple's store reached 40bn downloads on 7 January 2013, then 50bn on 16 May, so it was doing around 2.5bn downloads a month at that point.

If that pace continued, it indicates 7.5bn App Store downloads in the second quarter, which if App Annie's estimates are correct, means around 8.25bn downloads for Google Play.

(Bear in mind throughout this article that we're just comparing the App Store to Google Play. Android as a platform has numerous other app stores, from Amazon's Appstore to sundry Chinese portals, so the real size of the Android market is larger.)

How about revenues? Apple chief executive Tim Cook told analysts on 12 February that his company had paid out $8bn to iOS developers, then announced at WWDC on 10 June that the figure had grown to $10bn.

That's $500m of payouts a month, and thus around $715m when you add Apple's 30% cut back in. Which hints at App Store revenues of $2.1bn-ish for Q2, which by App Annie's estimates would mean Google Play revenues of around $913m for the quarter.

Rough calculations based on the estimates of an analytics company, yes. But my first reaction is to focus less on Apple versus Google, and more on the $3bn-a-quarter apps market across iOS and Android.
App Annie charts App Annie's charts showing downloads and revenue for Apple's App Store and Android's Google Play

Back to who's making all this money, though. App Annie reckons that games generated 75% of App Store revenues and 80% of Google Play revenues, despite only accounting for around 40% of downloads on each.

That's dominant, although bear in mind that the second most popular category is social networking, where the big Western social networks like Facebook and Twitter are making their money from ads, not app store purchases.

There is plenty more to chew over in the report. Watch India, Russia and Brazil in the top five countries by downloads on Google Play, for example, but also Japan and South Korea at the top of the revenues chart for Android's official store ? both buoyed by huge spending on mobile games tied into messaging apps like Line and Kakao.

So, is iOS better than Android, or vice versa? The boring, unheadline-worthy truth is that it depends what kind of apps you're making and where in the world you're trying to make money from them.

Free-to-play games makers will be looking with fascination at what's happening on Android in Japan and South Korea, but the games making the vast majority of the loot there have been developed locally.

Music's status as the third top-grossing category on the App Store will be making the music industry sit up and take notice ? streaming service Rdio appears to be doing well from selling subscriptions through in-app purchases, in contrast to the strategies of rivals like Spotify and Deezer.

But the report mostly reminds me of the challenge facing the third and fourth ecosystems in the apps world: Windows Phone and BlackBerry 10.

If iOS' App Store and Android's Google Play are generating $3bn of app revenues a quarter ? and remember, this doesn't include non-Google Android stores, advertising revenues or Netflix/Spotify-style subscriptions outside the app stores ? the arguments for developers to devote resources to porting their apps beyond those two platforms need to be more convincing than ever.

Waving a cheque-book to mitigate the risk is one strategy that's been tried, and there's merit to the argument for individual developers that being a big fish in a small-but-growing pond can pay off versus being a tiny fish in a massive ocean on iOS and Android.

But still, that's quite some ocean they've got there, even if its rising tide is sinking many more boats than it's lifting.

 

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