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Studies: iOS pays developers more, doubles ad impressions over Android

updated 09:23 pm EST, Wed November 27, 2013

Real-world use makes Apple the more valuable mobile platform

Various studies from a variety of analytics firms which measure real-world interaction with devices (rather than the nebulous "shipments" number) have once again determined that Apple's iOS platform far outweighs Android in two key areas: rewarding developers and user interaction. A study by Adfonic found that ad impressions on iOS outpaced Android (which supposedly has about a 6x larger base) by two to one. A Business Insider report found that developers for iOS make five times what they do on Android.

While Samsung is the only other company to make money in the smartphone wars, the percentage of their profit versus revenue pales in comparison to the iPhone. Apple's more advanced and numerous app "eco-system" is sustained in part by the fact that developers are both more likely to profit from apps on iOS than they are from apps on Android, and that the profit they make is far greater -- for every $1 an iOS developer makes in download revenue (ie paid apps), an Android version makes 19 cents, according to Business Insider, which compiled and analyzed the results from Flurry, App Annie and other analytics firms.

Android does a bit better in some specific revenue areas however; in-app purchase revenue in only 2.2 times higher on iOS than on Android, and in advertising revenue Android brings in 77 cents for every $1 on iOS. The latter would suggest, however, that there simply are not as many active users of Android devices as there are iOS users -- a shocking possibility given that "shipment" marketshare puts Android at nearly six times the number of devices in its base as Apple has (Apple only reports actual sales to end-users, whereas all other manufacturer only report shipments or sales to resellers).

Because Apple's products are aimed at more affluent users, numerous studies have shown that iOS users are far more likely to pay for quality content than Android users. While "freemium" games and other apps dominate both platforms, they are much more the norm for Android. Users of iOS products also respond better to targeted advertising: Google is said to make more money from iOS ads than it does on its own mobile platform, and Facebook advertising firm Nanigans reported last month that iOS ads returned 1,800 percent more revenue than the same ad on Android. Overall, advertisers using Nanigans on Android reported a 10 percent loss on investment on the platform.

Apple iOS users are also more likely to spend on digital media. While iOS users spend three times more per app on average than Android users, the iTunes Store is also responsible for 67 percent of all digital television purchases, and 65 percent of digital movie sales, reports AppleInsider -- on top of its 63 percent share of the worldwide digital music market.

It's possible that Android genuinely has a much larger base, but one that doesn't rely on third-party apps. However, this theory would appear to be contradicted by low Internet usage figures, as well as the ad impressions data compiled by Adfonic and others. While iOS and Android together account for 95 percent of all mobile ad clicks, Android accounted for just 32 percent of that (down six percent from the previous quarter) -- with iOS taking the remaining 68 percent.

Furthermore, on tablets (where Apple has always outsold and dominated its Android competition) Adfonic says that the iPad, "already the dominant device, [has] further established its position by gaining share." The iPad accounts for 76 percent of ad impressions on all tablets, and increased its iPad share of all Apple ad impressions to 21 percent in the most recent quarter -- up 62 percent from the previous quarter.

The figures might hint that while iPhone sales are also strong, the majority of new model sales are repeat upgraders -- whereas buyers are generally picking up only their first or second-ever iPad. Apple CFO Peter Oppenheimer suggested earlier this year that iPad mini buyers in particular tended to be first-time buyers, and the product was (and remains) wildly successful.

Apple CEO Tim Cook has hammered the usability versus "shipments" results over and over again in recent remarks, asking analysts an important question they have thus far failed to answer: "Does a unit of market share matter if it's not being used?" Pointing to real-world factors like low developer income, lower Internet usage and low levels of interaction with Android tablet users, Cook said that he "didn't know" what buyers did with them. "They must be in warehouses or store shelves or maybe in people's bottom drawer."

The answer alludes to two other, simpler explanations: either a high percentage of "shipped" Android devices are simply never sold to end users, or the majority of Android devices sold are lower-end and limited devices that aren't in the same class as premium smartphones like the HTC One, the Galaxy S III and Note, or the Lumia 920 -- with the same happening the tablet arena -- which distorts the image of Android's real competitiveness. It could be that analysts would get a more accurate picture of how well or poorly smartphone manufacturers were doing -- even without hard sales data from most makers -- if it looked at the "high-end" smartphone market when analyzing performance that includes Apple, and separate that from the "low end" of the market where Samsung and other rivals compete only with each other.

There is a precedent for this analytical view: Apple has been recognized for years as the dominant high-end (over $1,000 average selling price) personal computer maker. Likewise, when analysts look at profitability rather than volume, Apple has been the top manufacturer since long before the iPhone and iPad came along. Some have criticized analysts for only rarely counting the iPad and other tablets as "computers" rather than "mobile devices." On the rare occasion they do, Apple has been -- since 2010 -- the top "computer" manufacturer, even beating PC king HP.

by MacNN Staff



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