Getting users to pay for Android apps has been a struggle since its launch: the data has shown that Android device users prefer to download free apps. But that has been shifting over the last year or so. A good example of this shift is what’s happening right now in Japan: Just last month, the country knocked off the U.S. for the top spot in Google Play store revenue, according to a new report published Thursday by mobile analytics firm App Annie.
The U.S. has always brought in the most Android app revenue until now, and it’s a milestone made all the more remarkable since there’s just one Android app download in Japan for every four in the U.S. Yet in the last six months, revenues from Android apps sold in Japan have grown by a factor of 4.5. (App Annie says it only reveals the revenue totals to paying customers.) Most of that revenue growth is coming from the 10 most downloaded apps in the country, according to the App Annie Index, a new monthly report on the revenue and download trends in Apple and Google’s mobile app stores. This suggests that Android device users, at least in Japan, are happy to pay for the most popular apps — though “most popular” doesn’t necessarily equate with quality.
One reason Japanese Android users may be into paying for apps: iPhone use isn’t as widespread in Japan as it is in other established mobile markets. The country’s biggest carrier, NTT DoCoMo, predominantly sells Android phones. Softbank is the dominant iPhone seller, but it’s the country’s third-largest carrier. No. 2 carrier KDDI only got its hands on Apple’s smartphone a year ago.
But Japan is a good sign that the world’s most popular mobile OS is beginning to make money for others not named Google or Samsung. Overall revenues from Google’s mobile store are growing across the board outside of Japan and the U.S. too. Revenues from the Android app store have grown 17.9 percent from month to month, according to the index. By contrast, iOS revenues have actually shrunk slightly month-to-month, by 0.7 percent. Of course, the money made from selling apps and content via Google Play is still peanuts compared to what Apple developers pull down from the iOS App Store overall. Android developers make about 25 cents for every dollar iOS developers make.
But those numbers are going to continue to change because developers on the Android side are figuring out new ways of monetizing their apps: through in-app purchases, social channels and advertising. As Alex Williams, president of Kontagent, told the audience at GigaOM Mobilize recently, sometimes Android can actually be more profitable for developers: “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.”