All Android Store Competitors Combined Set To Surpass Apple’s iOS App Store In Revenue, But No Profits
A report on global mobile application markets notes that Apple’s iOS App Store remains the largest in the world in terms of revenue and is expected to retain its crown as “the most lucrative” until 2021, although all markets Competing Android software combined are expected to overtake the App Store in total revenue at some point later this year.
Apple’s lead on App Store profits continues to grow
The report, by App Annie, examines total revenue (broken down by the store and its developers), as well as initial app downloads. It doesn’t appear to be able to track proprietary apps or subscriptions, which would include revenue from titles like Apple Music, Keynote, and Garage Band, nor does it appear to count downloads of bundled apps like iOS Maps, News, and Wallet. Many Android phones need to download compatible titles on this platform, although these do not count for large or even zero income.
In January 2016, App Annie released figures for 2015, noting that despite a surge in Android app downloads from Google Play fueled by the company’s expansion into developing markets, the iOS App Store Apple continued to make more money and actually increased its lead in terms of profitability. on the official Android store.
At the start of 2016, iOS was earning 75% more than Google Play, an increase from Apple’s 2014 lead of 70% more traceable revenue than Google Play.
As downloads from Google Play increased, App Annie reported that its “revenue was lagging behind” and warned that “Android’s market share needs to increase in the high end of the smartphone market to generate more market share. significantly “.
Despite double the trackable downloads from the App Store, Google Play had only half of Apple’s revenue
At the time, Apple’s downloads were also growing: 20% in the United States, 30% in Japan and doubling completely in China.
In July, App Annie reported that despite double the trackable downloads from the App Store, Google Play only had half of Apple’s revenue.
In particular, Apple reportedly saw a huge increase in revenue from music streaming (Spotify and Apple Music) and entertainment (Netflix and HBO Now), while Google was not enjoying the growth in these areas as much.
The 2016 apps death lie
Around the same time, a media narrative started unfolding that apps didn’t matter anymore and users didn’t care about software. The novelty was supposed to be AI chatbots.
Peter Kafka seriously warned via Recode that “the app boom is over” because the total number of app downloads in the US is said to have declined 20% year over year. Dan Frommer had previously written for Quartz that most users did not download any apps, on average every month, according to comScore data.
Something was not true. During Apple’s “very bad / second best quarter in history” which ended in March, Enterprise Services revenue grew up by 20%, making it a quarterly turnover of nearly $ 6 billion. This growth in services was specifically detailed in Apple’s 10T as being “primarily due to increased sales of the App Store, licenses and AppleCare”.
No matter the experts, applications grow quickly
Not even a year later, App Annie now predicts massive growth in App Store downloads and revenue over the next four years. Instead of apps being dead – as various experts have complained since 2014 – the site says growth is picking up and will happen even faster than the group predicted last summer.
In the same July report mentioned above, App Annie pointed to a 20% CAGR (compound annual growth rate), calling for $ 102 billion in global gross revenue from mobile apps by 2021.
The group is now calling for a 25% CAGR of global mobile app revenue, aided by App Store subscriptions, which will result in total revenue of $ 139 billion in 2021. Games are expected to represent $ 105.2 billion. dollars, while other apps are expected to be $ 33.8 billion. in income.
Google Play and other Android app markets are expected to far overtake Apple in terms of the number of apps downloaded (above). The group claims that Apple distributed 29 billion app downloads in 2016 and predicts that number will increase to 42 billion by 2021. However, Google Play users reportedly downloaded 63 billion apps last year and are expected to reach 196 billion by 2021, while other Android application markets are expected to grow from 55 billion last year to 112 in five years.
Apple’s App Store will remain the world’s largest mobile software market
In terms of direct app revenue, however, Apple’s App Store will remain the world’s largest mobile software market. App Annie reported 2016 revenue of $ 34 billion, rising to $ 60 billion in 2021, while Google Play is expected to grow from $ 17 billion in 2016 to $ 42 billion in five years, while other Android stores will drop from $ 10 billion to $ 36 billion.
Add Google Play with all the stores in China and other markets that compete with it, and you get a number that exceeds Apple’s App Store revenue. Adding Chinese Android stores to Google Play is significant, as much of that growth is expected to come from China, where Google does little business on its own. Conversely, Chinese app stores do very little business in the West. Only Apple generates huge revenues in the two largest mobile markets in the world.
Developers also earn most of their money on the App Store
Beyond revenue, Apple also derives larger profits from the App Store, as its user population is much more willing and likely to pay for software.
Last year Ustwo Games reported 40% of its iOS users have paid to install its award-winning title “Monument Valley”, while only 5% of Android users have paid. The rest mostly downloaded pirated copies.
Of the game’s 2.4 million sales, 1.7 million were on iOS while less than 0.3 occurred on Google Play. Over 80% of the developer’s revenue came from iOS users. These stats play a major role in why games, productivity apps, and other mobile software tools are typically designed exclusively for iOS or are released to iOS first, and typically don’t get integrated into Android until later. in a version with advertisements.
A notable departure is Apple Music, which offers an ad-free version of its subscription service as an Android app.