Android’s smartphone app revenues gain on iOS: report
By Chantal Tode
September 3, 2013
Android's smartphone app revenues to double this year
Android’s smartphone mobile application revenues are expected to double this year, reaching almost $6.8 billion, according to new data from ABI Research.
While there has been much discussion about iOS as the superior mobile monetization platform, when it comes to smartphone apps, Android is making some significant gains. Driving the gains for Android is the strength of Google’s app advertising, growth in carrier billing and strong Android smartphone sales.
“What we are saying is that Android isn’t actually that far behind iOS in terms of mobile app revenues,” said London-based Josh Flood, a senior analyst at ABI Research. “In terms of the segments that they both compete in, Android is going to have the most success in terms of smartphone app revenues.
“In terms of the number of Android smartphones in use, there is a three-to-one factor compared to iPhone, so of course if there are more people using and downloading apps, there is a higher chance of making a profit for apps,” he said. “They have a much stronger skill set over iOS in terms of digital advertising.”
Effective app ads
While iOS still leads other mobile operating systems’ revenues by a significant margin, the fact that three times more Android smartphones will ship this year compared to iPhones is helping to boost Android’s revenue potential.
Android smartphone revenues will increase from 59.1 percent to 65.9 percent when compared to iOS smartphone app revenues over the next 12 months, according to the ABI Research data.
Another key contributor to Android’s strong app revenues is effective app advertising, including Google’s success with targeted online advertising. Android’s digital advertising is primarily based on Google’s analytics search engine and strong experience, which gives the company an edge over Apple, per ABI Research.
Another factor in Android’s growing app revenues is the incorporation of carrier billing for app purchases. App purchases through mobile carriers have recorded significantly higher successful completions when compared to paying by credit or debit cards.
Carrier billing could play a particularly important role in emerging markets such as Latin America and Asia-Pacific, where low-cost smartphones are taking off.
In comparison, iOS only allows in-house payments.
The revenue sources considered for ABI’s assessment were pay-per download, subscription, in-app purchase and in-app advertising.
For a long time, marketers approached the smartphone market with an iOS-first mentality. However, sales figures show that Apple is having a hard time maintaining the same level of excitement around the brand while Android continues to surge.
As a result, the need for marketers to include Android in their mobile strategies from the beginning is growing as the number of Android phones in the market increases.
“ABI Research is not saying that Android is going to overtake iOS,” Mr. Flood said. “There is a different side of the coin, and in certain facets Android is going to show some gains over iOS in terms of revenues.
“There is a bigger opportunity from a carrier billing standpoint,” he said. “IOS has its own internal billing process.
“We are seeing a bigger shift in terms of consumers willing to pay via the carrier.”
Chantal Tode is associate editor on Mobile Marketer, New York
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