How to Make Money With an Android App

Though the Android app marketplace has been playing catch-up to Apple’s App Store since its inception, it has realized impressive growth in the past few years. Revenue in 2013 totaled about $4.2 billion, of which about $1.2 billion went to Google. The number of apps, downloads, and revenue from Android apps is growing quickly, and is expected to climb even higher in coming years.
We recently highlighted the four primary ways to make money with an iPhone app. Each of those approaches applies to an Android app as well, and most app makers will use similar monetization strategies for their apps across platforms.
But there are some differences between Google Play and the App Store that are worth considering when building and promoting an Android app. Though there will be significant overlap with any iOS-based strategy, the two marketplaces are not nearly as similar as one might suspect. (By the way, if you’re enjoying this article, you may want to subscribe to our free newsletter; we’ll send monetization tips straight to your inbox each day.)

Android vs. iOS

Apple iOS19.4%15.5%
For starters, it’s worth noting that Android has a huge share of the smartphone market. While many assume that Apple dominates this space, Android actually holds nearly 80% of the market.
As far as app downloads go, Google also dominates. Android accounted for approximately 75% of all app downloads last year, while the App Store represented just 18% of the total.
But when it comes to the bottom line, Android apps fall way back. Here’s the median monthly revenue per app on the different platforms, according to Vision Mobile:
OSMedian Revenue
iOS$500 – $1,000
Android$101 – $200
Windows$1 – $50
BlackBerry$201 – $350
The total revenue generated from app downloads is also lopsided, but in favor of Apple:
Revenue - 2013
Yes, those numbers above are correct. Though Android devices dominate the marketplace and app downloads, Apple has a huge lead in revenue generated.
There are several reasons why iPhone apps make so much more money than Android apps overall.

Reason #1: Price Caps

Both platforms place a cap on what developers can charge for their app. Apple lets apps sell for up to $1,000, which may seem like a ridiculous amount to pay for a single download. But there are a few iOS apps apps that charge $999.99, and several more that charge more than the $200 price cap placed on Android apps.

Reason #2: Stronger iOS Presence in U.S.

Though Android dominates globally, Apple has a much stronger presence in the U.S. According to comScore, almost 42% of the U.S. smartphone market is held by Apple with about 52% to Android.
U.S.-based users tend to be wealthier and are more likely to spend on app downloads. Many of the Android users are in emerging markets where spending on paid apps is less common.

Reason #3: Developers Favor iOS

Google Play also has a much lighter review process than Apple. Once Android apps are submitted, they’re generally approved very quickly. Apple’s review takes much longer–often a few days or close to a week before an app is available.
This might seem like an advantage for Google, but for most developers trying to create revenue-generating apps, it can be a bit of a hassle. The lax review standards can lead to “fake” apps climbing up the charts. Recently, an app called Virus Shield climbed to the top of the charts, collecting more than 10,000 downloads at $3.99 each.
The only problem is that the app was a complete scam; it did nothing to protect devices. The only functionality was changing a red “X” to a checkmark when tapped:
Virus Shield
The open strategy Google has taken in its marketplace helps developers get their apps to market more quickly, but it also opens the door for scams like Virus Shield to accumulate thousands of downloads. Though the purchases are all being refunded, these types of scams will make users more skeptical about paid apps.

Reason #4: Different Audience Values

For advertisers, getting in front of an iPhone user is much more valuable than getting in front of an Android user. Some of the best data to quantify this came from Nanigans, a large buyer of Facebook ads. They have reportedly seen higher return on investment and revenue per click (RPC) from iOS devices than from Android devices.
It’s not a small difference either; according to their data, iOS clicks are worth about 6x more than an Android click to advertisers:

The simplest explanation for this discrepancy is the difference in the audience. To make a broad generalization, iPhone users tend to be wealthier and spend more money than Android users. So their clicks and eyeballs are worth more to advertisers, which translates into higher earnings potential for developers on that platform.
There is also some data to support this demographic difference in terms of payments for apps. Flurry Analytics published data in April 2013 comparing the average prices paid for apps (including free downloads) across different platforms. On average, an Android download costs only about 33% as much as an iPhone app and about 12% the price of an iPad app download:

There are also some differences in the breakdown of revenue sources for Google Play compared to the App Store. While both are tilted heavily towards in-app purchases, this bias is more extreme for Google Play apps:
App Revenue

Google PlayApp Store
In-App Purchases (Free Apps)98%92%
Paid Purchases 1%4%
In-App Purchases (Paid Apps) 1%4%
Source: eMarketer
This is further evidence that Andriod users are less likely to purchase an app. They have a stronger preference towards free apps, and a willingness to view the ads shown in free versions.

Bottom Line

Though the major smartphone platforms are similar in many ways, the monetization opportunities they present in 2015 are still very different. To summarize, Android users:
  • Are much more numerous than iPhone users;
  • Dominate the markets outside of the U.S., especially in Asia;
  • Have a strong preference for free apps over paid apps;
  • Are less valuable to advertisers than iPhone and especially iPad users.
The result is that most Android apps will not be nearly as profitable as similar or identical iPhone apps. If you’re looking to develop an app only on one platform, it will generally make more sense to focus on iOS. Fortunately, the development work can often be leveraged to produce versions for multiple platforms.
If you have any experience with or questions about monetizing an Android app, drop a line over at our free forums.
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