Photo: Flurry Analytics
More evidence is rolling in that Android’s app store is broken. According to a new report from mobile analytics firm Flurry, Android’s monetization continues to lag behind iOS, and now newcomer Amazon as well.For every dollar of in-app iOS revenue, developers earn only 23 cents from Android. That closely matches the results of another Flurry study from December, which found Android delivers 24 cents to developers for every dollar of iOS revenue.
However, it also has fallen far behind the new kid on the block, the Amazon Appstore. Developers receive 89 cents of revenue in the Amazon Appstore for every dollar of iOS revenue, a surprisingly high level considering Amazon only dipped into the market some 6 months ago with the release of the Kindle Fire. For comparison, that’s almost 4 times the monetization level of Android’s app store. While the Kindle Fire technically runs on the Android platform, it is a highly customised version of the operating system and it make sense to speak of them as different platforms.
This comes on the heels of a February report by mobile analytics firm Distimo that found that the Amazon Appstore was also a better marketplace for paid app downloads too.
Taken together, Android has a serious monetization problem. Here are a few key takeaways:
- iOS has a developer network effect. As we discussed in a recent note, the real network effect in the mobile platform wars is with the app developers, not the end users. If iOS monetizes so much better than Android, this could be terrible news for Android long-term.
- Android has a serious fragmentation problem. This is a big reason behind the monetization gap. There are so many systems, so many phones, that developers don’t really know what they’re developing for. While many applaud Android’s “open” ideology, it has been chaotic in practice. With every additional software update, Android’s fragmentation problem gets worse. Apple and Amazon’s dictatorial hold over their app stores can be problematic, but it is user and developer friendly.
- Amazon has commerce in its DNA. Developers trust that Amazon will “show them the money.” Amazon forced flexible paid-download pricing on to developers, and it delivered them more revenue at the end of the day.
- Will there be an Amazon phone? The success of the Amazon Appstore could be a precursor to the company’s entrance into the smartphone market. If Amazon can demonstrate to developers that it can deliver the goods on tablets, it should have no problem convincing them to follow it into the smartphone market. This could spell big problems for the conventional Android platform, but also Microsoft and Nokia’s nascent effort.
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