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According to estimates in a recent report, around $200m in iPhone apps are sold each month in Apple's App Store. The same report pegged the amount of money generated by app sales in Google's Android Market at only $5m.

But one company that develops apps that are sold in both marketplaces, Larva Labs, suggests that the gap between the iPhone economy and the Android economy may be even greater.

The reason? Despite producing Android apps that are ranked well in the Android Market, that have been featured by Google and that sell for $4.99/each, the company only managed to make $62.39/day on average from Android app sales during the month of August. As Larva Labs' Matt Hall writes, "Very difficult to buy the summer home at this rate".

For a direct comparison, Hall notes that Trism, a popular iPhone app, generated $250,000 in sales in the App Store in the first two months after its release. In the Android Market, it has been sold less than 500 times. He goes on to point out that the total amount of revenue generated by Trism's developers in the Android Market isn't much more than $1,000; in the App Store, a top five game can pull in $3,500 per day.

Now Apple obviously had a head start in this market and many people believe that Android has a bright future. Hall himself adds the disclaimer that "we’re still excited about Android in the medium to long term" and I think he has reason to be. But for Google to turn Android's potential into commercial potential for developers, it needs to focus on building the right experience and expectations.

Hall lists five ways in which Android Market is lacking:

  • Android Market doesn't provide screenshots for apps.
  • There is a 325 character limit for app descriptions.
  • The only way to pay for apps in the Android Market is through Google Checkout.
  • Free trumps paid in the Android Market and it's often hard to find paid apps.
  • Failed downloads and other "intermittent problems" are a recurring problem.

The implication: even if we readily accept that the App Store is going to beat out the Android Market for the foreseeable future, Google is not optimizing the Android Market experience to produce sales. This is kind of like launching an e-commerce website and avoiding all the best practices that are proven to boost conversions, average order size, etc.

And by failing to put its full weight behind the development of a robust paid app economy, Google is doing itself a disservice when it comes to consumer expectation. Love or hate Apple's approach to the iPhone economy, there are no illusions that it's an economy.

The very name -- App Store -- sets the expectation for consumers that if you want to play, you're probably going to have to pay. Despite Apple's shortcomings, which may or may not threaten the App Store's prosperity over the long term, it's hard to argue that the App Store hasn't been a rousing success thus far. Its proven ability to generate significant revenue for the most successful developers gives developers a significant profit motive to invest their time and money developing for the iPhone. The result for consumers: better apps, more choice, price competition.

In time, I think Google will have the opportunity to find its own success with Android and the Android Market. But to do that it will have to find a way to give the Larva Labs of the world the ability to earn that summer home.

Photo credit: Chad Jones via Flickr.

Patricio Robles

Published 1 September, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2403 more posts from this author

Comments (2)

Adam Tudor

Adam Tudor, Senior Digital Marketing Manager at The Black Hole

Even though the market for Android is currently smaller (though likely to increase in the next 12 months), there is still massive opportunity for app developers.  The market is excellent for useful apps, but the gaming side is severely lacking.

I've read a few reports stating that this is largely down to the audience (which I believe is correct to a degree), but when you compare the average quality of games apps on the iPhone to Android you can see there's a clear difference in quality.  Whether this is because games are easier to develop for one handset as opposed to functioning on several in Android I'm not sure, but I do know that the market needs some serious developers to get in there and to start churning out decent, polished games.  

The returns will pay off dividends in the future, with tens of handsets coming out in the next year.  Any games developer who gets some decent, polished, popular games in the market now will be sitting pretty in a years time.

about 7 years ago

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SeoNext

Android is calling apps “content.” Android’s software does allow for the distribution of ringtones, music, skins and other content, not just apps. So we’ll see non-app content in the market.Only 62 Apps were available upon launch of Android Market.Really a  nice post.Thanks for sharing thformatio with us.

about 7 years ago

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