Android Sales Rising, Android App Revenue Lagging

Google's Android continues its growth, as Google announced as part of their 3rd quarter earnings roundup (which was terrific, of course). The Android Market is now over 100,000 apps (about 30,000 of them are games), and apparently activations continue at about 200,000 every day, which pencils out to around 6 million new units a month. Whoosh. Google's mobile search and services drags in about $1 billion a year for the company, which will no doubt continue to grow.

We'll see the introduction of Android 3.0 this year, and probably more new versions next year. I'd bet on a tablet version next year some time, too. Google plans to a launch a streaming music service with Android 3.0 this year, according to reports. That should give it a boost, though rumors say Apple will be doing something similar at some point (they did acquire a streaming music company earlier this year).

The Android operating system overtook iOS in the second quarter in terms of global market share, 17.2% to Apple's 14.2%. Of course, they were both beaten by Blackberry and Nokia took first place for smartphones. But that was before Apple's iPhone 4 hit, and that has been a smash hit that bids to rewrite those percentages for the next report.

With all this, are developers making a lot of money off of Android apps? Well... not so much. This New York Times article lays out some of the problems. Sales are anemic compared to iOS app sales, in part because it's a lot easier to buy an iOS app; one click in the iTunes store and you're done. Google doesn't want to use anything but Google Checkout, and so most people have to enter in a credit card number and it is no longer simple. Also, there's no in-app purchase mechanism (which has been a huge boon for iOS developers), though Google has said they plan to implement that at some point.  Finally, many Android developers just depend on ad revenue, figuring that Google tends to attract people who don't plan to pay for things (since Google offers so many free applications and services).

Another big issue is the fragmentation among Android devices. There's a huge variance in the hardware and in the versions of Android, so developers have to spend a lot more time, effort and money testing their app on different devices. Yes, you have to check out your app on an iPod Touch, various flavors of iPhone and iOS, and iPad, but that's still far less of an issue than all the different versions of Android and the hardware it runs on. It almost reminds you of the bad old days of trying to create games for phones, with hundreds of handsets to consider. (At least, you don't have to worry about the telco getting in the way, or any problem putting your app on sale.)

I think we'll see more Android apps, especially from iPhone app developers looking to extend their success. Porting an app is going to be easier than starting from scratch, and many of your marketing efforts will help sales on both platforms. But it's a different market, and it still lacks some of the refinements of the iOS market. Those little touches can make a big difference in sales, and therefore a big difference to developers (especially small ones).

Marketers need to understand the differences between the two markets, and study them, before launching marketing efforts. Or even before finalizing app design; your revenue plans may need to force differences in the design. I wish it was all simple, but of course it's not.