Even though Android has huge volume momentum right now, and has reached over 10 billion downloads in its Marketplace, app developers are still struggling to make money.
According to Flurry Analytics, which tracks nearly 50,000 iOS and Android apps from around the world, developer interest in Android has decreased by a third since the beginning of 2011. At the same time, iOS developers make nearly four times the revenue of Android devs, which does not bode well for the financial viability of the platform.
A few things can be attributed to this phenomenon. Despite the fact that Android has a larger overall install base around the world (though not yet in Canada) users are not required to enter payment information when they sign up for Google Checkout. That means that users can get away with downloading free apps for the most part without ever giving a cent to Google or to app creators.
Google is trying to improve this by offering 10c apps for 10 days over the holidays, which will force users who want to pay for these premium apps to enter credit card numbers. The results also don’t take into account revenue made through advertising which some companies, including Angry Birds’ Rovio, attest to being in the millions of dollars.
Ultimately it comes down to virality: developers enjoy creating apps for iOS because it has a proven track record of people willing to pay for apps. As more companies enter the mobile apps and games market, they will tend to stick with what works, and Apple has created a viable and profitable ecosystem. Google’s Android platform encourages lower-cost devices, often to younger people who do not have the means, or are not old enough, to pay for apps.
Eric Schmidt has now famously stated that in six months app developers will be looking to Android first, but that doesn’t necessarily mean they will be making more money from it. Google needs to change the way mobile companies think about Android, and until then the above chart probably won’t fluctuate all that much.