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iOS’s lead over Android in app monetization is shrinking

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Conventional wisdom has held for a while that Apple’s iOS(s AAPL) platform was by far the best way to monetize apps. Sure, Android’s(s GOOG) platform was big but the users who tended to pay for apps were most likely using an iPhone, iPod touch or iPad. That’s changing thanks to the greater diversity of app monetization strategies — in-app purchases, driving traffic through social channels, and advertising — a panel of app experts said during a session at GigaOM Mobilize conference today.

For a long time it was reported that iOS monetization was five times better than what you could make on Android, said Raj Aggarwal, CEO and co-founder of Localytics. But because there are so many more ways of examining the data that tells a developer who is interested in their app, and different methods of making money from users, things are changing. “iOS’s lead, in terms of the minds of developers, is only slight right now,” according to Aggarwal. Android is a much closer second than previously thought.

Josh Williams, president and chief science officer at Kontagent, agreed with that assessment. When comparing app downloads between iOS and Android across the same geographic area and by device (smartphone versus tablet), “iOS actually monetizes only 40 to 50 percent better than Android, from the data we’ve seen. It’s actually pretty viable,” said Williams.

And in some cases, Android can even be more profitable, if developers and their marketers are really focused on their objectives, he said.

“While Android monetizes a little less well on a per user basis than iOS, the acquisition costs on Android today are much lower on a per user basis. So sometimes profitability on Android is higher,” said Williams. “Smart businesses that are operating scientifically look at that and allocate their spend for development and marketing across platforms on a profit per user and profit per install basis.”

Other platforms, like Windows Phone(s MSFT) and Blackberry,(s RIMM) aren’t really in the conversation for most mainstream app makers, though. Unless, Williams said, a business is “trying to do a real brand-building play and be a mass, mass market play,” like Rovio has done with its megahit Angry Birds franchise. For most app makers, it’s still all about Apple and Google’s mobile platforms.

There is, however, one area where iOS still holds a really big lead in the minds of developers, however.

“More than 70 percent are focused on iOS for the enterprise,” said Jeff Haynie, CEO of Appcelerator. “BYOD is a big trend … and I’ve heard quite a number of concerns about customers being burned from a security standpoint on Android,” said Haynie.

So, in at least one sense, iOS still has a big lead in the minds of developers.

Check out the rest of our Mobilize 2012 coverage here, and the live stream can be found here.

10 Responses to “iOS’s lead over Android in app monetization is shrinking”

  1. My previous tablet was a first-gen iPad and I did buy a lot of apps from the App Store for it including Pages, Numbers and Garageband. I also own a Galaxy S and my present tablet is a Galaxy Tab 7. I have bought lots of apps from the Play store as well. It’s incorrect to say that people don’t buy Android apps.

  2. My first smart phone was Android, so was my second, third, fourth, I had one app I actually paid for and when I bought it I was quoted one price, but charged another. My fifth smartphone is an iPhone. I don’t know how much I’ve spent in the App Store, but it’s probably about $500-750. Granted, I’ve had iPads for a long time, but I was never able to get an iPhone until about two months ago.

  3. What they seem to be saying is that they’re starting to make more money from Android by leveraging their customer’s not-so-private Web Search and map tracking data to earn money. This is NOT good news for Android end-users. Google is an advertising company and its customers are businesses out to track your every move to serve you ads. No advertising phone of me…

  4. I don’t like Microsoft, but the RT/Surface/mobile Windows platform will in time jump over the Android app store and have profitability with selling apps to the public, Android will not because it is basically a freeloader platform.

  5. The thing with iOS is (and always will remain) the ‘assurance’. If I read this right – over 40% apps are defunct on Google Play. I don’t know ANYONE who’s paid for an Android app. I know dozens who have no problem paying $4.99 on the iStore.

    Sure – the monetization techniques are improving, but iOS provides unbelievable confidence to the app buyer. And this translates to great confidence for the App maker. That connection (or lack of it) is clearly seen in FB apps.

    40K apps coming out a month. But App monetization continues to remain a challenge. Considering no other platform seems to be catching developer interest, I foresee iOS continuing to be the choice of serious app makers.

    However – the world has a tendency to throw up surprises ! :)