A recent internal study carried out by Distimo found that the top 200 highest grossing apps in the US generate over three times more revenue in the Apple App Store for iPhone (excluding iPad) than they do in the Google Android Market. And, crucially, this is a trend exaggerated in most other countries outside of the US.
The most recent figures from ComScore revealed that Android phones now account for 44.8 percent market share, compared to 27.4 percent for iPhone, so the fact that the revenue generated by iPhone apps is so much larger than it is for Android is surprising. They have tried to identify some of the reasons why the revenue of Android apps lags behind that of iPhone apps.
One reason lies in app discoverability. It should be easy for smartphone users to find the most relevant content for their phone with just a few clicks, and the most important and easy way for many smartphone customers to find applications is by means of the top overall applications in the app store associated with their mobile device. So, how are the iPhone and Android phones different in this respect? The difference lies in the content refresh rate of the top apps. As per a research done by Distimo, they had a look at the top 100 free and the top 100 paid applications in the US every day during September 2011, as research has shown these applications to be the most relevant when looking at app discoverability. They found that 631 distinct applications had a top 100 free or paid ranking in the Apple App Store for iPhone in September. By contrast, they found that only 313 distinct applications had a top 100 free or paid ranking in the Google Android Market in September. This implies that while the top 100 applications refresh quite fast in the Apple App Store for iPhone, the top apps in Android Market have remained nearly the same for the entire month. This makes it much less compelling for Android users to browse through the top Android Market applications on a regular basis to find new applications and spend their money buying apps.
Another important reason for the lower amount of revenue in the Google Android Market is the available content in its store. There is always a debate between fans and supporters of iPhone and Android phones about which store has the best available content. It is hard to measure quality in an objective way, but they tried to find a way to assess the quality of the apps nevertheless. Researchers analysed the top 100 most downloaded free and paid applications in the US during September in both the Apple App Store for iPhone and the Google Android Market to accomplish this. They looked at whether the top applications on the iPhone were also available for download in the Android Market, and 31% of the top applications on the iPhone were also available in Android Market. However, when looking at the top applications in the Google Android Market, 41% of the top applications were also available in the Apple App Store for iPhone. More top Android content is available in the Apple App Store than vice versa, which leads us to conclude that iPhone is the leader for new unique top content and Android is the follower. This is yet another reason that users may find it more interesting to browse through apps in the Apple App Store for iPhone than in the Google Android Market.
Ease of payment
An important reason why iPhone developers are able to sell more apps than Android developers is the cumbersome payment system associated with the Google Android Market. It is virtually impossible to get an Apple ID without having to enter any payment credentials in the Apple App Store – even when downloading only free apps. This makes buying paid applications later on much easier and accessible in the Apple App Store. Reversely, the Google Android Market makes it easy to download free applications without having to enter any payment options. Without these payment credentials filled in, it is much easier to download a free app the next time a user visits the Android Market than it is to download a paid app. There are rumours that PayPal will be a method of payment for apps in the Android Market in the future. This would make it much easier for many more people to download paid apps, since many people around the world already have a PayPal account.
Content is still king
There are several reasons why the Google Android Market has fewer sales than the Apple App Store for iPhone, but the most important reason is the content itself. Right now, the Google Android Market is the follower and the Apple App Store for iPhone is the content leader. The App Store for iPhone appears to be the most interesting store for users to browse content, but whether this will change in the future largely depends on the monetisation options Google will offer to make developers come on board the Android platform. The available payment methods and ease of payment appear to be important barriers to successful monetisation for developers in this respect, which means that content in the Apple App Store reigns supreme for now.