Study: Android Apps Not as Profitable as iPhone Apps

According to a new study, developers writing apps for Android devices face an uphill climb to make money from their efforts despite the platform's unparalleled growth.

Mobile app research company Distimo reports that 20 percent of all free apps and 80 percent of all paid apps in the Google Android Market have been downloaded fewer than 100 times, worldwide, to date. About 52 percent of free apps have been downloaded fewer than 1,000 times.

There are also very few free Android apps that are heavily downloaded. The report states that 5.6 percent of free apps have been downloaded between 50,000 - 500,000 times, and just 1 percent have been downloaded more than half a million times.

The news is even bleaker for paid apps. Only about a tenth of one percent of paid apps have been downloaded more than 50,000 times, and about 5 percent have seen between 1,000 - 50,000 downloads. "These figures reveal how challenging it is for Android developers to monetize applications in the Google Android Market using a one-off fee monetization model," the report concludes.

The study surmises that since most developers aren't making money from app sales, they're mining the advertising route to monetize their products. The uber-popular Angry Birds is used as an example. All versions of Angry Birds in the Android Market, says Distimo, are free and feature ads. By contrast, the versions of Angry Birds available on Apple's iOS platform -- including the iPhone and iPad -- are paid apps sporting "far fewer ads."

That continues to be Apple's great strength in the developer community -- it's simply easier to make money developing for iOS than Android. For example, six paid apps from Apple's App Store have generated more than 500,000 downloads in March and April just from the U.S. store. For Android, just two paid apps have exceeded 500,000 downloads total, including worldwide sales.

Those trends hold true for the mobile development genre with the most money-making potential: games. In the same two-month period studied, 10 iOS games got more than 250,000 downloads from the U.S. Compare that with Android Market, which has five games with at least 250,000 downloads total; as in the previous example, those are worldwide figures that span the lifetime of the Android Market, not just two months.

Google, however, is continuing to add ways to increase its developers' profitability, chiefly by making it easier for users to pay. For instance, in-app billing was added March 29, and Direct Carrier Billing launched on April 13.

Another factor in the equation is that iPhone users skew older and more affluent than Android users. The large range of Android models and price points means more buyers, but those buyers are much more likely to download free apps.

About the Author

Keith Ward is the editor in chief of Virtualization & Cloud Review. Follow him on Twitter @VirtReviewKeith.