Apple’s app revenue far outpaced Android’s earnings, according to Piper Jaffray, underscoring the iPhone maker’s edge in luring developers to create apps, which in turn draws consumers.
Apple accounts for between 85 and 90 percent of mobile app spending, with more than 13 percent of the Cupertino, Calif.-based company’s apps being paid, as opposed to just over one percent of Android’s programs.
This gap likely means Apple’s app developers won’t defect to Android in the future, even given increasing dominance of Android-powered devices in the marketplace. The open nature of Android’s system might allow nearly anyone to offer an app in the Android market, but software developers are making more money creating for Apple, earning about $3.4 billion this year, compared to less than $240 million for Google developers.
The report’s author, Gene Munster, suggests Apple is expected to hang onto a 70 percent share of mobile app revenue for the next 3-4 years, preserving an important financial edge for Apple even as its share of the device market declines.
Android made gradual gains in the paid app market this year, but the open-source platform was also plagued by malware, with the number of infected apps in the Android market increasing by nearly 500 percent, according to one report. Rising malware threats may cause users to shy away from Android’s app market, especially with mobile payment systems on the rise.
On the other hand, Apple requires proof from developers that apps originate from a trustworthy source, which may lead users to view its offerings as more secure. Users may also be willing to spend more at Apple’s App Store, paying an average of $1.50 for iPhone apps and $6 for iPad apps by year’s end, while apps costing under $2 account for the bulk of Android’s app sales growth.
Apple is also expected to further target app offerings to specific groups, such as enterprise users. Apple rolled out a B2B App Store this summer, allowing businesses to bulk-buy apps for employee use. Targeted strategies such as this will likely help keep app revenues high for the device maker, especially as enterprise users turn away from problem-fraught BlackBerry devices.
Apple’s formula for app dominance is simple. People download its apps more often than Android’s, and spend more money doing so, facts that may help Apple stay competitive even as Android continues to ship more devices and offer more apps in its market.