Monday, April 27, 2015

Chinese Android App Stores Surpass Google And Apple In Number Of Downloads

A new study this morning disturbs the traditional thinking that applications iOS yield more money for the mobile system developers when compared with those who also programmed for Android devices. Instead, existing after taking into account the large number of unofficial app stores, the consulting firm Digi-Capital found that Android does not only dominated the volume of downloads in 2014, but also earned more money than iOS last year.

When it comes to understanding the dynamics of the mobile application ecosystem, the accepted wisdom is that Android leads the world in terms of app downloads, but iOS generates more revenue for their developers than those sold in Google Play. This remains true, according to various reports - including the latest from the App Store analytics, which stated that, from the first quarter of 2015, worldwide revenue from the App Store was about 70 percent higher that in the Play Store, before 60 percent of third quarter 2014.

However, when it is taken into account all the stores that sell applications for the little robot system, the situation changes completely. That's why the analysis of Digi-Capital examined all major app stores in China, including Apple, but also Baidu, Qihoo 360, Tencent, Wandoujia, smaller ones.

"Apple and Google took different approaches to China. Apple embraced the Chinese market with spectacular success, but ultimately, Android overcame," explains Tim Merel, Managing Director of Digi-Capital. "Along with China's inherent strengths and business dynamics, the Chinese ecosystem of apps sale now appears fundamentally different from all other markets," he says. When you take into account these other app stores, iOS and Google Play app downloads are a minority in the world, as can be graph below. But downloads alone does not equate to revenue, as many other reports have indicated.

That said, for mobile developers, aimed at iTunes App Store is somehow an easier way to generate revenue because their applications make more money per download than in other individual app stores. Apps sold on iTunes can indeed make more money than Android with relatively low numbers of downloads - even when the way they generate revenue that is through paid downloads unlike in-app purchases.

Meanwhile, in Google Play, apps need more than twice the download volumes than in iOS to generate the same amount of revenue. This means that developers have to reach large numbers of download in order to be successful there.

"Google Play is a great place to operate, but the long-term trend of lower amount of revenue per download compared to iOS seems determined to continue," says Merel.

Similarly, the Chinese app stores (Baidu, Qihoo 360, Tencent, Wandoujia, and others) also require high download numbers in order to generate significant revenue. According to the Digi-Capital, apps in China are expected to reach more than eight times the number of downloads, on average, compared to iOS to do the same amount of money.

Still, despite the fact that the shops of the Chinese Android applications are now dominating in downloads and revenues, the balance could change again until the end of 2015, the report says. Apple has been successfully target the Chinese market with their devices, with strong sales thanks to the iPhone 6 stealing old customers of Xiaomi, Huawei and Samsung. Apple had the largest market share of smartphones in China in the first quarter of this year in terms of sales, and achieved a record 25% of smartphone sales in urban markets of China.