The consensus is that Google has the volume and Apple has the margins; Android devices cost less to buy compared with Apple devices. This pattern is mirrored in the application stores: Google Play Store has the volume and iTunes has the high margins, because there are more Android users compared with iPhone users across the world. The average revenue per user is approximately half for Android compared with iOS but there are signs that this is starting to change. According to a gaming marketing company, DAU-UP, the average revenue per user, or ARPU, has increased during 2014. A year ago Android games had just 20% of the ARPU of iOS games. Last month, December, this had shot up to 65%. It’s a significant jump and iOS are still spending more, but it shows steady growth during the year. However, the average revenue per user is just one part of the equation: media advertising costs for Android devices is considerably less compared with iOS. The advertising costs are between 20% to 50% less, which means that when this is taken into account, some games are noticeably more profitable on the Android platform compared with the iOS platform. DAU-UP only has information on games rather than applications, but there’s no reason to think that there is any difference between applications and games.
Going forward, Android’s solid growth is threatening Apple’s revenue per customer advantage. Android is on a strong upward trajectory and has considerable momentum. Could the Google Play Store’s revenue figures reach Apple levels? Yes they could, and this combined with less expensive marketing costs points towards Android being a more cost effective platform compared with iOS. DAU-UP believe that developers are turning more in favor of the Google Play Store. Their Chief Executive Officer, Idan Nizri, had this to say on the matter: “After years of being the unwanted step child, Android is having its Cinderella moment, as game developers are increasing their Android development resources to meet the growth in Android revenue. We’re hearing more and more developers developing games ‘Android First.’ I have no doubt that game developers will invest more time, effort and resources in Android in 2015.”
It’ll be interesting to see how things pan out; Apple and Android are following different strategies. Apple are going for the premium end of the market whereas Google are aiming for the next billion users with their growth. If Android’s average revenue per user continues to climb, if developers continue to give priority to Android over iTunes, the next two years are going to be really exciting if you’re developing Android apps.
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