Android

Apple makes money, but Android makes markets

We rightly laud Apple for its ability to get us to pay a premium, but the world owes more to Google for making mobile computing a commodity.

Android

Apple had a mind-blowingly amazing quarter. Good for them. But as much as we may want to cheer on the industry's most profitable vendor, the real focus should be on the user. Viewed through the lens of the end user, we should be hoping Google wins.

Apple, after all, builds software for the rich. Google? For the poor.

Thankfully, the mobile development ecosystem has demonstrated that it can get by without Apple's fat margins.

The Apple rich get richer

Apple is a luxury brand. While it caters to the lower-end of the "rich" demographic by offering last year's models at lower price points, Apple's primary focus has always been on delivering a premium experience to those that can afford its premium price tag.

In doing so, Apple has followed (and fed) an interesting, if troubling, shift in household income.

As The Wall Street Journal's Christopher Mims highlights, "Apple's and Xiaomi's successes reflect the world's growing income inequality." Apple supplies phones to the rich, while Xiaomi caters to the comparatively poor. Phones priced in the middle range have seen a "hollowing out" of demand, with the world split into "a luxury market and everyone else."

Apple, of course, dominates the luxury market and profits handsomely thereby:

"[J]ust as a growing class of global rich is creating a demand for the highest-end phones — made by Apple — so, too, is a growing middle class creating demand for [mostly Android] phones made by Xiaomi and its ilk....

"Predictably, distribution of profits between these two markets mirrors the distribution of wealth between the buyers of these goods."

All of which seems to mean that as happy as we may be that Apple makes a lot of money, we should be much more concerned with the Android market and its impact on the world.

Blessed are the poor, for they shall inherit Android

Fortunately, developers are rushing to Android to satisfy the needs of less affluent consumers.

AppFigures' analysis
By appFigures' analysis, in fact, more developers joined the Google Android ecosystem in 2014 than flocked to Apple and Amazon combined: 388,000 developers (Android), compared to Apple (282,000) and Amazon (48,000).

In turn, those developers have now made the Google Play Store (Google's app store) the richest ecosystem of apps, growing significantly faster than Apple's app market.

While the Google Play Store now has the most developers building the most apps, this doesn't make Android the most effective route to developer riches.

In fact, as VisionMobile analysis shows, iOS developers make a lot more money than their Android peers. (App Annie data indicates that iOS generates 70% more annual app revenue than Android does.)

The obvious way to explain this disparity is simply to look at the relative markets for their apps: iOS developers are building apps for the rich, whereas many of the Android developers live in emerging markets and develop apps for those markets.

Digging into the data on app categories, it's perhaps not surprising that the fastest growth category for iOS is Business apps (followed by Lifestyle, with Games growth tapering off), while within the Android market, Games constitutes the fastest-growing category, with Business and Entertainment tying for a distant second place.

Google to the rescue

Google is at the heart of this swelling app market, but let's not rush to canonize the advertising giant. After all, Google isn't trying to feed the poor. It simply wants to sell ads to them and has calculated that the more people to whom it can give mobile internet access, the greater its ad market will be ($6.30 per user, per year, by some estimates).

There's nothing particularly noble in that.

But regardless of its motives, we should still laud the result: low-cost phones for less affluent consumers across the globe. That's something worth celebrating, and perhaps it's something we should lionize more than we do Apple's ability to convince rich people to pay up.

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About Matt Asay

Matt Asay is a veteran technology columnist who has written for CNET, ReadWrite, and other tech media. Asay has also held a variety of executive roles with leading mobile and big data software companies.

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