App Store Holds 85-90% Share of Mobile App Dollars Says Analyst

Discussion in 'iOS Blog Discussion' started by MacRumors, Nov 21, 2011.

  1. macrumors bot




    Apple has frequently promoted how much money has been paid out to developers selling apps via the App Store. The latest pronouncement was during the iPhone 4S introduction when Scott Forstall announced that Apple had paid out three billion dollars for app sales. The point Fostall is making when sharing these totals is that developing for iOS is more profitable for developers than other platforms, most notably Android.

    According to analyst Gene Munster at Piper Jaffray, Apple commands 85 to 90 percent of mobile app dollars, with Google's Android Market Place generating just 7 percent of the gross revenue of the App Store. Munster anticipates Apple will continue to hold more than 70 percent of mobile app dollars going forward.


    Munster says Apple developers have made more than $3.4 billion since the App Store opened, compared to just $240 million for Google developers. As with all analyst estimates, these numbers should be taken with a little skepticism, but by all accounts the App Store is a tremendous success.

    Image courtesy The Verge

    Article Link: App Store Holds 85-90% Share of Mobile App Dollars Says Analyst
  2. macrumors 68030


    This is huge. From a developer stand point, you want to develop for a system that will give your software the best chance of becoming successful. If you can only write for one system, iOS is the way to go. This is just the opposite of what happened with Apple and Microsoft. With Windows being the dominate platform for desktops, developers flocked to it because that is where their customers were; Apple tried but never got nearly as many 3rd party developers. This time around, the shoe is on the other foot. We'll see what Apple does with this success.
  3. macrumors 68000


    I've been a mac user for over 10 years. I've never bought anything from the iTunes or App store and don't intend to.
  4. Moderator emeritus


    Yes, as long as Apple can produce numbers like that, their market share vis-a-vis Android is pretty irrelevant. It'll be interesting to see what kind of sub-share Amazon can eke for the Fire.
  5. macrumors 601


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    Pretty interesting how Android dominates hardware market share, but Apple clearly dominates the the software front. Shouldn't the software business be driving the hardware business? This is at least true in the portable handheld gaming market.
  6. macrumors 6502a

    It's interesting that the avg. ASP for Android is higher than iOS. I suppose smaller sample size has to do with that, but what apps on Android are expensive (and by expensive, I consider anything $9.99+ expensive for an app)?

    I also wonder how they come up with that number. By number of apps with a certain price (which makes me wonder if they consider sale prices as a new "app" to affect average) or by average price paid for an app, which makes the number very deceiving.


  7. macrumors G4


    The App Store is where the $$$ is.

    This was obvious a long time ago. Not really news.
  8. macrumors 601


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    I know, and...? Lol.

    I'm the complete opposite. I now purchase everything media on iTunes: apps, books, music, movies, TV Shows. Same goes for the Mac App Store. I love the system and I've been moving all my software purchases to it.

    Not sure why people hate it so much. It's been nothing but super streamlined convenience with excellent customer service.
  9. macrumors regular

    I think you forgot to add a "Neener-neener! :p :cool:" to your post.

    Seriously, though, your post puts an entirely new spin on the above story. Turns out, Apple oughta be shaking in their boots if they're banking on a successful iTMS or App Store! I mean, with you in the mix... :rolleyes:
  10. macrumors G5


    Has the analyst taken into account ad revenue pocketed by developers? I assume so—it would be an absurd omission, since both platforms offer paid and ad models. But the article doesn’t specifically clarify that.

    Either way, with or without ad revenue, this kind of big split is no surprise. Then factor in the higher development and support costs for a fragmented Android “platform”! (In reality a chaotic collection of dozens of related but incompatible platforms.) Then look at piracy on Android—not just by users, but by developers repackaging the work of others (with or without added malware)!

    No thank you. If/when I finish my iOS game, I’ll surely be more interesting in putting time into a second game to sell on iOS... not into porting and tech support for the chance to wring a few dollars out of the first game on Android.
  11. macrumors 65816

    Asp = ?
  12. macrumors member

    Wirelessly posted (Mozilla/5.0 (iPhone; CPU iPhone OS 5_0_1 like Mac OS X) AppleWebKit/534.46 (KHTML, like Gecko) Version/5.1 Mobile/9A405 Safari/7534.48.3)

    It's an awesome platform and really has seen a resurgence in the independent/basement programmer competing and often doing better than the big budget guys. Hats off to Apple for that.
  13. macrumors G5


    Actually, doesn't iOS dominate in hardware user base/unit sales too, last we know?

    The iOS app market reaches more than just all of Apple's phones: it’s iPods and iPads too.

    Whereas the Android app market reaches LESS than all Android phones: Android tablets have not taken off, and many "Android” phones are Android-based in technicality only, and may count towards Google’s market stats but can’t run Android apps. (For example: Asian OS variations, limited “feature phones” based on Android, and the Fire tablet: if Amazon sees success with that, it will boost book sales, but not Android app sales!)

    Average selling price.
  14. macrumors demi-god


    And you're proud as punch about it, too.

    Don't compromise your principles!

    Stand firm against the tide!

    People who buy from the App Store or iTunes are lemmings!

    March to your own drummer!


    BTW - why don't you buy anything from the App Store or iTunes??:confused:
  15. macrumors 601


    Ha! Well played! I forgot about iOS as a whole. It is indeed a larger user base than Android.

    Go Apple! :cool::apple:
  16. macrumors regular


    Android: The New Commodore 64

    Android is running the risk of becoming the new Commodore 64 - a cheap computer that flew off the shelves due to the rock bottom price, but attracted a userbase that refused to pay for software.

    Ultimately, it's the software and not the hardware that makes the platform a success. That's the reason why the IBM PC and Mac are still around, while Commodore is long-extinct. PC and Mac users were willing and able to pay for software.

    Having Android hijacked by Amazon isn't doing the platform any favors, either...
  17. Mad-B-One, Nov 21, 2011
    Last edited: Nov 21, 2011

    macrumors 6502a


    Average Sales Point = Mean price of apps - now it does not qualify if it is the mean (most likely), the median or the mode. Average also does not qualify if that is average of sold apps or offered apps. So, you are still in the blue about what that actually means statistically.

    Example one (most likely):

    Averaged all sales that really append for paid apps on the platform. This would represent the closest to what you want to know as a developer but it is distorted because iOS represents 2 platforms with iPad and iPhone/iPod while the tablet market for Androids has most likely almost no impact on sales numbers.

    Example two:

    Averaged all prices of apps available for paid apps on the platform. Problem here is that there are prep apps for passing the bar / becoming a lawyer that go for $999 (max allowed by Apple) which greatly would distort the statistics. So, you hang in there not really knowing what the revenue would be.

    Example thee:

    Both example one and two including the free apps. This would lower the number but it would also be more representative on how much a typical customer will spend per download and how many free apps you might sell. This also is interesting for people who want to decide to either use the business model with advertisement and free apps or getting the revenue through trail app & purchase premium.

    Did I miss something?
  18. macrumors 68000


    1) iTunes music store sucks for electronic music. I use beatport.
    2) App store i find useless. I also don't agree with apple's cut in profits.
  19. Moderator emeritus


    I'd be curious about that too -- there are handfuls of expensive apps on the iOS store, but since the early days of the store, the $9.99 price point even has largely disappeared -- there used to be lots of buzz around games by places like Gameloft that debuted at this price point, and that's much rarer now.

    I would guess the most common expensive app purchase on iPhone is a navigation suite, and this would be relatively rare on Android, since there is a turn-by-turn tool built in. Otherwise, there are expensive productivity apps (like QuickOffice, the iWork apps, etc), but I don't know what kind of sales volumes those apps generate.

    EDIT: as far as ASP is concerned, if the numbers in the chart for Google are used... 6.75B apps * 1.3% non-free * $3.79/app = $332M, which is within rounding error of the reported revenues; the number for Apple is also within rounding error. So it looks like this number is a straightforward mean price for non-free apps).
  20. macrumors 6502

    You dont buy apps because you don't agree to the share apple gets of the profits? That makes zero sense. As the end consumer the profits the developer makes doesn't affect you at all.

    Now if you said you refused to develop for iOS, then you may have a point.
  21. macrumors 68000


    Really? So you'd rather have the developer make less money than they deserve? What does apple do to deserve their huge chunk of the pie?


    Downrank me moreso. Clearly I'm a horrible monster and/or fool for not using the app store or iTunes Music Store. Whoever said I have a choice is also wrong.
  22. macrumors 6502

    The developer agreed to the terms, did they not? They are making profit on software made for hardware Apple developed, are they not? Apple not only provides the medium for the software but also the distribution. Or do you think 500,000sqft data center facilities are free?

    You can boycott it all you want. You just have no logical reason for doing so.
  23. macrumors G4


    It is intensely satisfying to see that Apple's tremendous successes have driven certain types of people absolutely bat-**** insane.
  24. macrumors 68000


    Please don't put words into my mouth. I never said I'm boycotting ITMS or the App store. I have no need for either and already stated that for electronic music Beatport is superior in every way. Adding my 2 cents on apples profit sharing does not mean im boycotting.
  25. macrumors 6502a


    Do you seriously think that retailers pass 100% of a sales price on to anyone who creates the product on their shelves? What does apple do? They provide the entire storefront, handle transactions, push updates, and provide customer care. What DON'T they do? Make you go to a store or find an obscure website for the exact same product.

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