Google and Apple's corporate spat is seen clearest in the mobile space. In the battle for app downloads, who will win out?
Overall, the mobile app industry is dominated by two app stores -- Apple's App Store and the Google Play store. There are other options, but brand loyalty and accessibility keeps smartphone owners coming back to the App Store and Google Play.
In fact, Gartner forecasts that iOS and Android app store downloads will account for 90% of global app downloads in 2017. While these two giants aren't as commanding in certain markets, especially the Asia Pacific market, they are the top dogs on the whole.
According to Gartner research director Brian Blau, Apple has always seemed to be the most valuable app store for developers, as it tended monetize apps better and offered developers a chance to make more money than they could at Google Play. When the Gartner forecast was published in September 2013, Blau noted that 60% of apps on the App Store were free while 80% of apps available on Google Play were free.
Raul Castañon-Martinez, of 451 Research, said that the research done by 451 shows a clear divide between Android and iOS users in terms of apps. According to 451 Research, the average Android user downloads 4.1 apps per month, with 3.4 average free apps downloaded. For iOS, 451 Research said that the average iOS user downloads 6.2 apps per month, with an average of 4.3 free apps every month.
It's difficult to fully understand what drives the monetization Apple has been able to achieve. Blau said that it might be due to a combination of user intent and developer interest.
"Is it a self-fulfilling prophecy? Developers target iOS, consumers love Apple devices, and because those two things feed off each other," Blau said. "Apple seems to be the more valuable platform for apps, even though Google has, what I would call, a strong growth trajectory, just in terms of the number of devices that are out there and the number of people that are using Android."
For most app developers today, the choice is to target both stores, Blau said. Often times it's the question of which one they are going to go for first. Many people tend to target Apple first because if the status of the iPhone.
But, all of that could be changing.
In addition to revenue potential, many app developers are attracted to overall device share percentages as well. At the end of 2013, Gartner reported that Android commanded 77.8% of the worldwide market share for smartphones. Although forking and fragmentation issues mean that a good number of these devices are not Google Play devices, it is still a statistic to be considered.
The number of Android devices in use seems to be climbing as well. At Google's 2014 I/O developer conference, Sundar Pichai announced that 538 million Android devices were in use in 2013. That's up from 223 million in 2012 and 77 million in 2011. That growth in devices means more Android users and more opportunities for developers to make money from apps sold through Google Play.
"Well, the most interesting point about the Play store that I've seen in a while came out of I/O: Play services paid out $5 billion+ since last year, and that was an increase of 2.5x from $2 billion+ a year before," said Jeffrey Hammond, a principal analyst at Forrester.
What that translates to in terms of actual revenue is hard to say, but Citigroup analyst Mark May believes that it is one of the main factors driving revenue growth for Google. He estimated that revenue from Google Play could grow from $1.3 billion in 2013 to $5.2 billion in 2017.
To put that into perspective, the Apple App Store pulled in $10 billion in 2013, putting Google Play at 13% of Apple App Store revenue. So, while Google Play is still nowhere near Apple in terms of app revenue, Hammond noted that they are now within the same magnitude of sales.
Developers face problems on both platforms. Blau said that, while he doesn't have any research data on this, he has heard from developers that they tend to push back against the amount required by revenue sharing fees and they struggle with getting their apps seen in the first place.
"I can tell you that developers complain to me about a few things," Blau said. "The first is discovery issues on the two app stores. They say that if they're a small developer, or even a medium sized company, it's hard to get exposure."
The ways in which users discover apps is almost identical in both stores. According to a report from Forrester Research, Inc., the majority of people find new apps through general browsing in the app store. The next most popular method of discovery was recommendations from friends and family and the third most popular was browsing through top-rated or most popular lists.
There's an argument that they novelty of apps is wearing off and people are becoming less fascinated with them, as they get used to app stores and the concept of apps as an alternative to the web. Blau said that this is true of individual users when they move into the later years of smartphone ownership, but also true for the market as a whole.
Despite the slowing of app downloads, the total addressable app market will continue to grow. Efforts in developing countries mean that more potential mobile users are on the horizon for many companies. Additionally, wearables, the connected home, and the connected automobile movements will provide more outlets for app development and downloads. According to a Gartner report, app market revenue is estimated to hit $77 billion by 2017.
What do you think?
We want to know. Which app store offers a better experience? For developers, which store do you target and why?