Apple makes you rich, Android leaves you...bored

By Jonny Evans

Smartphone developers: You won't yet get rich quick on Google's Android Market, step away from fragmentation land and get yourself started on Apple's [AAPL] iOS; that's the message from app store analyst, Distimo.


80% ignored

The latest research tells us Android users just aren't spending money. An astonishing 80 percent of all paid apps have been downloaded fewer than 100 times in the Google Android Market worldwide.

"We found that only two paid applications have been downloaded more than half a million times in the Google Android Market worldwide to date, while six paid applications in the Apple App Store for iPhone generate the same number of downloads within a two month timeframe in the United States alone," Distimo said in its report (grab it here).

You get what you pay for, and while Apple exercises quality control over App Store apps, Google does not. This means when you visit Apple's store you have a certain guarantee of security, but when you visit Google's store the only thing you can know is that when it comes to security, you need to protect yourself, and that not every app runs so well on every fragmented Android device.

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The mighty few

These discomforts for app explorers translate into significant differences between the firms. "Google Maps is the only application with more than 50 million downloads in the Google Android Market, making it the all-time most popular application in this store," Distimo explains. Otherwise, just 96 applications have been downloaded over 5 million times in the Google Android Market.

In other words, when consumers look to the Android Market, they find little that interests them. Android leaves them...bored. Meanwhile Apple has attempted to trademark the expression, "there's an App for that." This slogan even got lampooned on Sesame Street (below).

"Looking at just games, there are five games in Google Android Market with over 250,000 downloads worldwide. In the Apple App Store for iPhone ten games generated more than 250,000 downloads in the United States alone in two months," Distimo claims.

The result of this price pressure is that developers are attempting to make their money on in-App advertising on the Android platform.

Take Angry Birds -- a huge paid-for success on the iOS platform, on Google Androd these games are free and feature lots of ads.

Who makes the money?

Arguably, only Google's making money on Android. Google accounts for 20 per cent of the Android market's most downloaded apps -- Google Maps (at number one) and YouTube (in third place, in a list mostly dominated by utilities.

And who gets rich from Google Maps and YouTube? Google. And who takes a slice of most of the ads revenue inside Android apps? Google. Who makes the OS and gets the revenue from that? Google. So in Android-land it seems to me handset makers and application developers take the risks, but Google gets the money.

Contrast this with Apple. An interview with iFund investor Matt Murphy tells us that firms who make games and other apps for Apple devices are being hired or purchased by other firms looking to gain an instant foothold in the mobile market.

"A number of our companies have gotten acquisition offers in the last six months and I assume that will continue to go on," he told Reuters. "...if you don't have a leading mobile product... you better get into the game because in a year or two year from now, it's going to be too late."

Apple and the App Internet

He explains the equation: It took app developer ngmoco 18 months to achieve revenue of $1 million a month. Now it takes as little as six months to achieve the same -- on the iPhone. Murphy warns that the landscape is becoming more competitive, but says he has no plans to launch an Android development fund.

Apps are important. Forrester CEO George Colony sees them as the beginning of the App Internet, which has reached a $2.2 billion worldwide value and is growing at an 85% annual compound rate. "That is the architecture of the future," said Colony.

And when it comes to that future as it is today, Apple's is the only version of that future with a viable business plan. Though eventually this should change.

How should Google change its Android ways to make better business for developers, and what can Apple do to make things even better?  Drop me a line via Twitter or in comments below and let me know. And please, I'd be honored if you chose to follow me on Twitter so I can let you know when these items are published here first on Computerworld.      

Copyright © 2011 IDG Communications, Inc.

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