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Summary:

Larva Labs, an Android developer which has chronicled many of the shortcomings of Android Market and the plight of its developers, finally sees some cause for hope. It comes from new monetization opportunities like alternative app stores, in-app purchases and the growing potential for ad revenue.

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Larva Labs was there when the Android Market began two years ago. The New York developer launched Retro Defense, one of the standout games on the Android platform that topped the paid charts. Other apps have followed, including Slidescreen, an innovative home screen replacement app. What hasn’t changed is the waiting for decent revenue.

But now more than ever, Larva Labs — which has chronicled many of the shortcomings of Android Market and the plight of Android developers on its blog — sees some cause for hope. Part of it has to do with the growth of Android, but it’s just as much about new monetization opportunities: things like alternative app stores, in-app purchases and the growing potential for ad revenue. “We were in wait-and-see mode a year ago, but now we’re at the stage where we can see light at the end of the tunnel,” Larva Labs co-founder John Watkinson told me.

Things are still not great; Watkinson said the company’s Android apps are profitable, but hardly robust. Even with the explosion of Android device sales, Larva Labs’ app revenue remains largely unchanged in recent months. The company’s iPhone apps do more to pay the bills, which has been an ongoing issue, captured on the Larva Labs as well. The company has been one of the more vocal developers in highlighting the needs of the Android platform and documenting its performance.

Watkinson is encouraged by sales of Android devices, which topped the third quarter smartphone sales charts in the U.S., but he’s more encouraged by things like Verizon’s VCAST App Store, which Larva Labs has submitted its apps to. The Verizon store, which will be available on the carrier’s Android devices, includes the option for carrier billing, a key feature Watkinson hopes will shake loose new paid downloads. The Android Marketplace requires you to buy using Google Checkout, a service that’s more difficult to use, especially for people who haven’t already set up an account. Watkinson said Larva Labs has also submitted apps to Orange’s app store in the UK, and is open to other apps stores, both from carriers and independent providers. Though he worries it will add more complexity and confusion for users and more work for him, it has the potential to get sales moving. “I don’t know how it will turn out,” he said. “It’s a risk, but it’s necessary, because Android Market hasn’t been keeping up.”

Watkinson also likes the new options for in-app purchases from companies such as Zong, Boku and PayPal. He said he’ll be really excited when Google also offers in-app purchases, helping fully unlock the promise of freemium apps. I’ve written about how freemium games now occupy more than a third of the top-grossing list of the iPhone App Store. Freemium is a powerful tool, and one that may be critical for Android developers, who still struggle to get people to pony up initially for apps. Watkinson said Larva Labs is also learning how to better monetize ads, and the company is now looking to craft programs that are not only unique, but have clear potential for ad revenue.

It’s good to see long-time Android developers finally seeing reasons for optimism, though it’s unfortunate that many of the solutions are coming from third parties rather than Google. It’s still going to be a while before Android devs see the same kind of money iPhone developers see. There are cultural issues around Android, such as it’s apparent favor of free downloads. But the tide is slowly turning, and it’s about time for patients devs like Larva Labs.

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  1. Well, That’s one LONG tunnel, indeed compared to iOS!

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  2. stop kidding yourselves, neither iOS nor Android dev’s are making enough to eat. only a few of the big fish do while for the rest its just a hobby.

    neither Apple nor Google see hardly any profit on their “app stores”, its just there to help sale hardware.

    why is it mobile blogs never mention this or hard numbers? even if they do its only the success stories & not the bottom 99%. could it be they are trying to profit with advertising on current trends?

    luckily in a few years the market will crash, only the strong will survive, then maybe we can finally start seeing more consistent quality & less crap.

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    1. You are very wrong that only a few iOS devs make enough to eat. There are many companies and individuals focusing on iOS apps and doing quite well at it. This would be obvious if you were paying attention.
      The Android app market is terrible though and so is the app quality and Android App marketplace. Fragmentation is a huge issue.

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    2. Then why aren’t they making money on Android apps? Terrible marketplace, fragmentation of devices, OS versions, and UI layers glommed on to fix Androids terrible UI. Even the Android marketplace is becoming fragmented. its a bad situation for Android devs and getting worse. Google doesn’t care. Their only concern is putting ads in your face on Android devices and they don’t have any problem doing that. It was obvious that fragmentation would become an issue but I don’t think anyone thought it would be as bad as it has turned out to be and getting worse.

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  3. There will be 100s of millions of Android phones, there is no way a good app cannot make money, it costs so little to make one. Just get it right and support it, much easier than selling software in the olden times where you had to spend on marketing and discoverability and so on.

    Just do some simple calculations, a group of 10 devs if they make a top selling app across all platforms selling a 2$, you can make 20-30 million $ easily per year, pretty good money, but no world changing.

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    1. Dream on Rdx, dream on.

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      1. Troll on Frank, troll on

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    2. lol, there are very few “Angry Birds” level devs out there.

      most devs would be THRILLED just too make a few thousand off all their work.

      so say you spend a few months making an app in your spare time, then a few more months waiting for approval, then a few more months during its sales supporting it.

      you’ve already spend 1/2 a year making just a few thousand dollars, most people can go out & get a “real” job making that in a week or 2.

      the whole app craze is going to go down as 1 of the biggest farces in tech history after a few more years of bust, devs already know this, just the public doesnt.

      personally, i’m looking forward to the slow down. app store “programs” are awful in comparison to the PC industry & just googling what you need.

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  4. [...] Hall, co-founder of Larva Labs, one of the early developers in Android Market, said to me today that he’s excited about the [...]

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