Google (GOOG) likes to play its cards close to its chest, but on Tuesday at its annual I/O developers conference it released two key business numbers — monthly active Android users (1 billion, not counting China and Amazon) and dollars paid to app developers ($5 billion in the past 12 months).
That allowed, for the first time, an officially sanctioned head-to-head comparison between Apple’s (AAPL) App Store and Google Play, confirming what analysts had already guessed: With half as many users (470 million) Apple gets twice the app sales ($10 billion, up from $7 billion in fiscal 2013).
In other words, Apple iOS users are spending more than four dollars for every Android dollar.
Why would this be? In a Wednesday blog post, Andreessen Horowitz’ Benedict Evans suggested five contributing factors: (I quote)
1. Android’s market share is strongest in relatively lower income countries
2. Many people in those countries lack credit cards and Google has been very slow to offer carrier billing
3. Android phones average $250-$300 where iPhone average $600 – people who choose to spend the extra money are sending a signal about their intents. That is, we don’t know what the ARPU for a Galaxy S5 user is, but it’s probably very similar to an iPhone user – but Galaxy S5 users are a small minority of Android users
4. Apple offers a distinctly different proposition to Android: perhaps the people who are attracted to that proposition are just more likely to spend money – that is, maybe iPhone users do spend more than GS5 users.
5. Finally, this can become circular: if developers believe that Android users do not pay, then their behavior will be affected – they may offer a free ad-supported app instead of a paid app, or have a lower price. And if they decide not to support Android or support it second, then their users will gravitate to iPhone first, which becomes self-fulfilling. You can see this clearly on Android tablets – magazine apps have low use on Android so are slow to support Android, so users who want magazine apps don’t buy Android tablets.
UPDATE: Touching on the topic in a note to clients Thursday, Cowan’s Timothy Arcuri estimated that Apple’s payments to developers over the past 12 months may have been as high as $11 billion.
“We continue to believe Apple’s latest suite of software and services announced at WWDC bodes well for long-term ecosystem lock-in,” he wrote, “while new programming tools should resonate with developers and help drive longer-term services monetization.”