In the May 2011 app store report by Distimo, which covers all of the major app stores, the focus was on the lack of revenue being made by developers on the Android platform. One of the major findings was that:
20% of all free applications and 80% of all paid applications have been downloaded
less than 100 times in the Google Android Market worldwide to date.
These figures shows that paid downloads are not selling very well on the Android Market. In my opinion a major contributor to this lack of sales for paid apps is the fact that Android phone owners do not need to have a Google checkout account in order to to download apps. This means that they may never purchase an app and will always look for one that is free. This differs from Apple who will not let consumers download apps unless they have an iTunes account which must have a payment card associated with it. This means that the customer already has a payment mechanism in place and is therefore more likely to make impulse purchases that cost a small amounts of money.
This then raises the question, how can money be made on Android? There other solutions such as crippleware that offers limited functionality and then full functionality has to be purchased. This can be done using in-app purchasing, which could either be facilitated by the platform or by a trusted third party such as Paypal. However, this is a path less trodden and the success of this method is not well documented. The other alternative of course is in-app ads such as Admob. This may currently be the best option for Android developers given the tendency toward free apps, unless Google finds a way to entice the people who do not have a Google checkout account to create one.
Maybe the consumer will be more likely to purchase apps if more mobile networks implement carrier billing, allowing the app purchase to be added to the users telephone bill.
I don’t know if I agree with this. I think it only has to do with the value the user expects to get for that 99c he pays. And this ties back to how good the ‘good’ apps are, which ties back to issues a developer faces, like fragmentation.
On the iPhone and an Android phone, you enter your credit card info once and only once. And I’d prefer the device not asking me this info unless I decide I want to use my card!
I agree with you that the earlier Android apps were not of great quality, but there are some really good ones out there and Google is working hard on the fragmentation issue with Ice cream sandwich. There are also bad ones on the iPhone which people pay for, so why are the Android downloads for paid apps so bad?
Because it is 10x easier to pirate and sideload applications on an Android device than it is on an iPhone. One click in the application settings and all I have to do is download the illegal apk to my Android device and install it.
That is a really good point. Does this mean that there is no point in creating paid apps?
I work at a major media company that has both paid and free apps that are downloaded at the “highest” levels in the market today for both platforms. The problem stated in this post is real and it has nothing to do with “quality apps”… the ease of use created by Apple starts with the up front need to have an iTunes account whether you are buying paid apps or downloading free apps. There are some high quality paid apps on iOS that outsell Android downloads 2X even though the number of Android users continue to grow at a very strong rate. Same app exactly…but 2X sales difference?
The original statement “In my opinion a major contributor to this lack of sales for paid apps is the fact that Android phone owners do not need to have a Google checkout account in order to to download apps.” is dead-on in regard to THE fundamental reason for the Android revenue problems.
Downloading apps is an impulse and behavioral activity… and if you come across a 99 cent app or any paid app that looks interesting BUT because you’ve never set up your Google checkout account you don’t want to take the time to do it now… just for that single application. Kind of like buying a pack of gum at the grocery checkout counter would become more difficult if you first had to jump out of line and get money from an ATM vs. just adding it to your existing group of groceries and staying “in line”.
With all of that said, the trends clearly point to FREEMIUM apps becoming the #1 way to generate revenue on either platform and the original problem will become prevalent in this scenario as well. Impulse and Behavior that would lead a person to “buy” gets diluted if the checkout stand hasn’t been established.
It makes me wonder if Google have realised that this is a problem and will do anything about it. I think it is a huge problem as developers will prefer to develop for iPhone as that is where the spending power is.
I think you are right about the problem carrying over to the Freemium model which I think is a great way of getting users to download the app and spend some time with it before making a financial commitment.
Perhaps a solution would be for Google to allow developers to decide whether someone could download an app – even if it is a free one – if they don’t have a Market Account. This would effectively create a two tier system for users, separating them into payers and non-payers. This would add value to some apps without actually increasing cost to the customer, and it would encourage non-account holders to sign up in order to access the more valuable free content.
I think this may upset a lot of users and would cause a barrier to people downloading the app. There is also a risk they would just find a free alternative.
I agree not having the checkout set up may be an issue with the revenue. However, I can say that I like the applications with a free version that is limited or has advertisements. When I upgrade (purchase) I get new features, rid of the advertisements, or both.
This may not be the easiest or best option for developers, but I like it from a user view…
To be honest, this is a good option and not very difficult to implement. The problem is that it is difficult to make money from Ads unless you have a huge number of downloads and users.
As far as in-app ads go, are there many developers out there willing to give out spaces on their apps and let ads shown on it?
For purchasing apps, “allowing the app purchase to be added to the users telephone bill” this in my opinion will contribute to revenue increase.
“As for as in-app ads go, are there many developers out there willing to give out spaces on ther apps and let ads shown on them?
“allowing the app purchase to be added to the users telephone bill” – I personally think this will contribute to revenue increase. As I just read a post somewhere complaining not being able to pay wihtout a credicard when purchasing an app. “
The infrastructure is there for the carrier billing. It is now up to the carriers and Google to roll it out.