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App Stores: Google Growth Serious Problem For Apple!

  • Written by Syndicated Publisher No Comments Comments
    December 3, 2012

    Coming off of my post this morning lamenting on how most smartphone hardware manufacturers are dead in the water, I am reminded of the rant from August before last – The Mobile Computing Wars Are Progressing Exactly As Anticipated – Google Is Killin’ Them!!! Well,I was right and as the investment world started coming to their senses, Apple’s share prices visited physics 101 and danced with gravity, reference:

    Many brand name following die hards think this is just a momo trading dip (BTFD), but
    those of you who follow my paid research closely know better, despite what those white shoe squid types may lead one to believe (reference pick to the left). As reported by Venture Beat’s John KoetsierApple’s app store revenue is 4X Google Play’s … but Google Play is growing 24X faster and as gleaned directly from App Annie’s blog:

    jelly-bean-vs-ios6-620x325

    The gap between global revenues on iOS and Google Play is significant, but it’s gradually closing. Whilst iOS revenues are four times larger than its counterpart, Google Play revenue grew 17.9% in the last month, whilst iOS revenue contracted 0.7% in the same time period.

    Apple’s App Store is still the king of mobile apps stores, with four times the revenue of Google Play, but Google Play is growing much, much faster than the App Store.

    “While the iOS app store revenues grew 12.9 percent in 2012, Google Play grew an astonishing 313 percent. That’s something I wondered about in July when Apple’s third quarter sales results showed a $100 million drop in iTunes store revenues, but I lacked data at the time to make a full case. The same trend was visible in free downloads, where even though iOS users download 10 apps for every 9 apps Android users download, Google Play grew 47 percent to iOS’s 4.5 percent.”

    Interestingly, Japan’s Google Play store outsold all others in October 2012 — the first time a non-U.S. country has led in revenues on a major app store. That’s particularly amazing since Japanese users download at a rate that’s one-fourth the rate of U.S. user downloads.

    “This represents a major tectonic shift in the international app store economy and one that I’m sure publishers will be looking to take advantage of,” said Schmitt.

     About a year and a half ago I opined on Why Software Developers Can Make More Money On Android. Of course, many developers chimed in by saying that I was out of my mind. It’s amazing how rare pragmatic foresight is in this day and age. With revenue growingat 24x the rate of the market leader and not from an insignificant base, methinks I may have had a very valid point.
    From App Annie’s blog and downloadable report (click here for the source and the original report):
    AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 03AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 05AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 06AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 07AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 08AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 09AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 10AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 11AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 12AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 13AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 14AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 15AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 16AppAnnieIndexNov2012Report.pdf utm sourceappannieutm mediumblogutm campaignc00041 Page 17

    We have created a revenue model that empirically compares the revenue generation potential to a software developer on Android and on Apple – assuming equal efforts are applied on both platforms! The last phrase is key. The results should be obvious to most, but alas there are probably many who may find it hard to grasp…

    As of the last two quarters, the Android would have thrown off significantly more cash than iOS for a given app. That is not all. The assumptions used to derive these figures were heavily, heavily in favor of iOS. While there may have been objective cause to tweak heavily in favor of iOS due to the ubiquity of the Apple App Store in the past in comparison to the nascent nature of the Android ecosystem, Android’s Marketplace now has between 150,000 and 200,000 apps and is reportedly adding 50,000 apps per quarter. Adding that to the fact that Android has the world’s largest installed base AND the largest growth rate in the industry and this should be a no-brainer. Alas, in order to err on the conservative side if to err at all, we tweaked heavily in favor of iOS.

    About The Author

    Reggie Middleton is an entrepreneurial investor who guides a small team of independent analysts to uncover truths, seldom if, ever published in the mainstream media or Wall Street analysts reports. Since the inception of his BoomBustBlog, he has established an outstanding track record
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