Google’s New App Revenue Sharing Model Is More Lucrative Than Apple


Google, part of Alphabet Inc. (NASDAQ:GOOGL) now, seems to have left no stones unturned while competing with its smartphone OS rival Apple Inc. (NASDAQ:AAPL). Irked by the Apple’s move to increase the revenue share for iOS app developers when a user subscribes for service via an app, Google has also announced that Android app developers will take home a bigger chunk of revenue than earlier. Interestingly, unlike Apple, the new revenue sharing arrangement will come into effect from the day one when a user subscribes to the service via an app. Going further Android app developers will take 85% of the revenue coming from app subscription services compared to 70% earlier, and the rest of 15% will go to Google. Apple, however, will only allow iOS app developers to take home a bigger cut if app subscriber remained hooked for more than 12 months in a row.

According to sources, the Android behemoth has already offered this new policy to some entertainment companies. Google has always tried to push app developers to work on both the platforms, Android and iOS.

The move may also be attributed to the fact that Google has recently announced to incorporate Android Play Store in Chromebooks also. Thus, the search giant, in turn, will need to rope in a bigger number of app developers who can create apps for every device and for every purpose.

The move will also lure many app developers who are currently working for iOS and windows platform as Android is the dominant player in smartphone ecosystem capturing 83.7% of the global smartphone market in 2016. The total numbers of active users on Android platform are 1.4 billion and a whopping 65 million apps were installed through Google play store in 2015.

Revenue is the prime reason for app developers for sweating themselves out. A study revealed that 35% of the app developers claimed that they work for money. A whopping 55% of the developers earn around $1000 per month while 4% of the developers are the lucky one’s earning around $100,000 per month. The revenue sharing incorporated by Google will bring a sigh of relief for its developers.

Apple rules the app revenue Market

Considering the 85%:15% revenue share model for subscription-based apps that both the smartphone OS giants have adopted, one cannot deny the fact that the Cupertino giant is well ahead in terms of revenue when compared to its counterpart, Android.

Apple app users are affluent compared to the Android, the usage behaviour and demographic of iPhone and iPad users clearly box them in an elite group and most of such users don’t shy away from premium services offered by Apple platform. That’s the main reason why the revenue through apps is higher in iOS compared to Android.  Apart from that, iOS customers spend a hefty amount on app subscription compared to their Android counterparts. The Cupertino giant garners 80% more revenue from apps as compared to the smartphone behemoth Android.

Developing an App for Android is a daunting task

Developing apps for iOS platform is far easier than Android platforms, thus, this move by Google may be considered as an incentive to keep Android app developers interested. The extra effort that the developers put in making apps for Android was revealed in a survey; Around 30% more time is required for a developer to make an app ready for Android platform as compared to the iOS platform. The developers work on Swift language to develop their apps for iOS devices which is quite precise. In contrast, developers who work on Java to make apps for Android need to write 38% more lines of codes to make an app ready to launch.

The most hectic situation that a developer has to deal with while working on Android platform is the fragmentation. Despite the fact that it’s been more than a 6 month for the launch of Android M, 35.4% of all Android devices run on Android Lollipop and 31.6% of the devices are still running on almost a three-year-old Android KitKat. Interestingly, only 10.1% of the Android devices are running on the latest Android Marshmallow, also called as Android M. On the other hand, 84% of the iOS devices are using iOS 9 (Latest iOS) whereas only 11% of the Apple mobile devices are powered with iOS 8. Thus, it’s a ridiculous amount of task for Android  app developers to make requisite changes in their apps to allow a seamless experience for every android app user who is using Kitkat or Marshmallow.

Despite all above challenge and advantages Apple has, a large number of developers, around 86% prefer Android platform to build their apps whereas 57% of the developers prefer building their apps for iOS platform. Thanks to the biggest chunk of the pie, Android owns.

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