Analyst: Android Market Makes 7% of Apple App Store’s Revenue

BY Yatri

Published 23 Nov 2011

iPhone vs Android

An analyst with Piper Jaffray estimates that the Android Market has made a small fraction of the Apple App Store’s gross revenue: 7%.

That’s startling when you consider that a recent report had revealed that Android has captured  52% of the smartphone market during the third quarter.

Piper Jaffray’s analyst Gene Munster estimated that the Android Market has made only 7% of the total revenue that the App Store has made. This estimation is based on the gross revenue that each store has ever made.

AppleInsider has focused on a few important notes that spring from Munster’s report. First, that the Android Market’s paid apps constitute only 1.3% of their total app catalog, compared to the App Store’s 13.5%. While the total number and quality of apps are up for debate, it’s interesting to see that the Market has a larger proportion of free apps.

Secondly, the Android Market’s average price of the top 50 paid apps is $3.79. Apple’s average is $2.01, meaning that Android users pay more on average per app but pay for far fewer apps in the long-term. Munster has also estimated that the average number of apps on each Android device is 34, while the average for each iOS device is 71. He bases this estimate on the 200 million total Android activations, as well as stats provided by Androlib.

Lastly, AppleInsider has Munster quoted as saying:

“In other words, it appears that Apple has roughly 85-90% market share in dollars spent on mobile applications,” he wrote in a note to investors. “While Google has closed the gap in terms of app dollars spent over the last year and we continue to believe Android will grow smartphone share faster than Apple, we believe Apple is likely to maintain 70%+ share of mobile app dollars spent over the next 3-4 years.”

We’ve previously covered the fact that iOS’s US market share surpassed 27% in terms of installed user base, and that Apple has grabed over half of mobile phone industry profits with just 4% of the global market share in terms of devices. And, this is despite evidence that the iPhone is losing ground to Android in terms of sales.

Now we can see that Apple has an 85-90% market share in terms of money spent on apps. It’s clear that even with a minority – albeit growing – share of devices and users, Apple has no trouble pulling in a ton of profits from users.

Munster’s summer poll of Apple app developers at the WWDC 2011 found that almost half of his respondents developed apps for Android as well. However, all of his respondents had said that they feel the iOS platform is easier to develop for and is better for monetizing an app.

[via AppleInsider]