Can developers survive in Android Market?
Half of iPhone users and 40 percent of iPod Touch owners download one or more premium applications each month, compared to 19 percent of Android smartphone users, according to mobile advertising network AdMob's July 2009 Mobile Metrics Report. That translates to about 26.4 million iPhone users and 18.6 million iPod users purchasing software from Apple's App Store, 
compared to just 5 million users downloading paid apps from Android Market--according to AdMob, the disparity in revenues between the two platforms is even greater, with iPhone and iPod touch apps generating a combined $198 million revenues each month, and Android Market yielding just $5 million monthly.
While the number of applications available via the App Store continues to dwarf Android Market's inventory, the enormous revenue schism between the two storefronts is still alarming. Here's another shocker: Android developer Larva Labs speculates that AdMob's Android revenues estimates are probably a bit high. Writing on the firm's blog, co-founder Matt Hall admits Larva Labs' Android app revenues averaged just $62.39 per day in August--"very difficult to buy the summer home at this rate," he adds. Larva Labs' apps aren't exactly languishing in obscurity, either: "Our two best selling games have been ranked and are currently ranked pretty highly on that hard to find list of paid apps," Hall notes. "RetroDefense was #1 for a while and is currently around #12 with a perfect 5 star rating. Battle for Mars is currently #5 overall with a 4.5 star rating. Both of these games are selling for $4.99, which is on the upper end of the price range. Finally, both of these games have been featured by Google in the market app and on the Android website."
Nor is Larva Labs the lone developer struggling to break even in Android Market. Hall cites the example of Demiforce's hugely successful iPhone puzzle game Trism, which raked in more than $250,000 in its first two months in the App Store. So Demiforce ported Trism to Android Market, where the title has sold fewer than 500 copies to date. "That's $1,046 total earnings, max," Hall contends. "How psyched are those guys that they ported a huge hit to Android and can't even cover a party sub for the release dinner? By comparison, if you were an iPhone developer with a game in the #5 spot, you'd likely be earning around $3,500 a day (based on recent numbers from tap tap tap)."
It's anyone's guess whether Larva Labs' experience is typical of the average Android developer's struggle, but Hall speculates that given RetroDefense and Battle for Mars' respective positions on the bestseller list, the firm is probably on the high end of the earnings curve. Although Hall points to a number of fundamental flaws undermining Android Market's potential--the absence of app screenshots, failed and stalled downloads, and credit card verification delays among them--the relative scarcity of Android devices appears to be the primary culprit behind its negligible download rates, and until more Android smartphones hit retail, the situation is unlikely to improve. "I'm sure Android will be on a lot of phones at some point in the future," Hall concludes. "Whether it'll be possible to target it profitably as a small developer, I'm not sure." Me neither. -Jason
Comments
Posted by Jeff Judge | September 1, 2009 - 10:49am
This is really just supply and demand. There are far fewer Android phones out there, thus far fewer users and consequently far fewer apps. My assumption is that this will change over time as Android is released on new phones that consumers want to buy.
Posted by Anonymous | September 1, 2009 - 1:31pm
Agree with Jeff Judge. The Android market has simply not reached a critical mass. However, two things that will hold back that market development are: a) the lack of a desktop window into the Android store--shopping on a tiny handset screen is tough; and b) exclusive reliance on over-the-air downloads.
Posted by Giff Gfroerer, i2SMS | September 1, 2009 - 3:04pm
I don't agree with a supply and demand issue. It is the payment mechanism that is making iPhone apps successful and android flailing in the app store market. iTunes provides a simple way to purchase an application. With Android you have to have a google checkout account set up. No one wants to hassle with this. App stores have to find a way to do micro-payments through the carriers. Until we see an easy payment solution like iTunes, the premium applications outside of iTunes will suffer.
Posted by Anonymous | September 1, 2009 - 4:50pm
It is difficult to make money when what you sell is CRAP. The particular citations -- are for two games that have been technically obsolete... for DECADES. Just take a look at the graphics - they suck. Maybe if they developed something that is actually decent, they might make some money... or not.
The second thing to realize is that i-phonies are for MORONS -- who are more interested in mindlessness like being FASHIONABLE than in having something that ACTUALLY DOES SOMETHING. Due to the lower average IQ of the i-diot, you have a greater proportion who aren't smart enough to save their money for something good rather than blow it on software that won't actually do anything useful.
And then, of course, there is the paid market AVAILABILITY issue facing android... not all regions that have devices running android have access to paid apps, so even if people wanted to, they wouldn't be ABLE to buy paid apps. Do these statistics take that into account? I.e., what is the buy-rate in JUST THE USA for example?
And to the douchebag saying that you need a google checkout account... pure nonsense. All you need is a credit card and to punch in the numbers on your screen.
Posted by Anonymous | September 1, 2009 - 8:40pm
I am a developer and what I see is that Google has done a good job at hiding paid apps. They have mixed free and paid in the top seller lists, so the paid apps are way down on the list. There is a way to see only paid apps, but most users don't know about it, because the option does not show on the top level screens, only on the screens where the apps are listed. I did not know about it myself for a couple of months. Also there is no website to browse the Android Market, like Apple has.
Posted by Xenobiologista | November 24, 2009 - 1:42am
Part of the problem is that paid apps are only available in a few countries. US Americans, who tend to flock toward Apple products, are among the few countries who have access, obviously. If you open up the paid Android Market to East Asian countries where HTC is more popular and in general, people are more open to different brands, I think paid app revenue would shoot up.
I bought a G1 second-hand in the US and then moved to Singapore. I like Robo Defense FREE and Maverick Lite and am ultra annoyed that I can't buy the full versions.
Posted by Xenobiologista | November 24, 2009 - 1:44am
Btw, sorry for double posting, just want to add some helpful information: Anonymous September 1, 2009 - 8:40pm is incorrect, there is indeed a website where you can browse the market from a PC. See http://www.androlib.com/
Posted by Anonymous | June 28, 2010 - 9:08am
Biggest issue as i see it is the OS itself.
Due to the pathetic amount of free internal memory the apps themselves cannot be too big which is limiting for a developer but also (as i have found out having my Desire for only a few weeks) that i started to run out of memory very quickly , i wanted to try apps out but i cant install too many.
I know that Froyo goes some way to fix this but even the flagship HTC desire does not look like getting this anytime soon so simply i just cant download apps
Posted by Anonymous | July 13, 2010 - 8:52am
We’ve just launched a service that helps Android developers monetize apps, thought it might be useful – http://www.metaflow.com/news/2010/07/06/metaflow-gets-down-android
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