Amid all the fanfare over new iPad 2 hardware, Apple’s CEO Steve Jobs boasted that the company has now paid out a cumulative $2 billion to developers for apps sold in the App Store. This comes just eight months after it announced developers had made $1 billion from the app store since the store launched in July 2008.
This is a huge number and highlights one of the reasons Apple is doing so well in this post-PC era. It’s not only building devices that embody the intersection of technology and humanities, as Jobs likes to say; it’s also creating an environment for developers to take advantage of these more personal and powerful machines. This vibrant community of programmers has helped push Apple’s count of apps up to more than 350,000.
The Asymco blog recently (and accurately) estimated that Apple had paid out $2 billion to developers over the course of 31 months, compared to the 34 months it took for record labels to make that much money on iTunes. This suggests Apple’s App Store is on a huge growth trajectory and shows why developers are still so loyal to the iOS platform. Even with some restrictions with the App Store, they have a better shot at making money there.
But the $2 billion isn’t just coming from paid downloads. Apple developers are also raking in money from in-app purchases, which have become a major revenue source for devs in the last year. According to Distimo, an app analytics company, revenue from in-app purchases both in free and paid iPhone apps was 49 percent last year, compared to 51 percent of paid download revenue. And that’s not counting any money that developers are getting on their own through advertising efforts.
The point is, Apple’s App Store is still the top destination for developers because it has robust revenue-generating options ensuring it won’t be shoved aside anytime soon. Android’s ascendance will certainly draw developers, but until it becomes easier to make money there, it’s not going to be the priority for most developers. Google, for its part, is improving the money-making potential of Android with an announced in-app purchase system and a new web store front. It’s also looking at expanding carrier billion options and trying to improve app discovery. But for now, Apple has 2 billion reasons why developers should stick with iOS, and that’s a lot more than Google can say. And as more users buy iOS apps, it further locks them in and makes it harder for them to switch platforms.
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