December 5, 2012 at 10:33 am

Google Says Android Apps Finally Make Money; iTunes App Revenue Still 4X Google Play

android ios google play itunes revenue eric schmidt app annie

Apple’s iOS created the modern smartphone as we understand it today, but Google’s open-source copycat Android quickly made up ground, and is now the top-selling operating mobile operating system.

According to the latest IDC predictions, Android’s top sales rank will persist next year. So why are there so many more great apps for iOS than there are for Android (sorry, Android people, but it’s true)? That’s because app developers have always made more money on iOS than any other mobile platform. However, that landscape started changing within the last six months, according to what Google executive chairman Eric Schmidt said in a widely-circulated Wall Street Journal interview.

In response to the WSJ’s statement that “developers currently earn more from building Apple apps than Android apps,” Schmidt said:

“Google Play [Google's app store] and the monetization just started working well in the last year, maybe the last six months. The volume is indisputable, and with the volume comes the opportunity and the luxury of time.”

Parsing this statement, Schmidt does mention that “monetization” is headed in the right direction, but his talk of “indisputable” volume sounds like it’s about more downloads instead of money. Still, the “opportunity” clearly exists to turn all of those app downloads into dollars, either through sales or a more robust advertising platform (Google’s strong suit), as well as “the luxury of time” to get monetization right on Android, because at least the app download counts are moving in the right direction.

Developers are sure to make a note of that when trying to decide whether to build an Android version of their current apps or a new iOS app, which could make Android a more alluring platform for users — and that should make Apple at least a little bit nervous.

So, Google’s Eric Schmidt says Android developers are finally making money, which is a good sign for the app ecosystem. Then again, he would say that. Here are some real numbers from App Annie, which tracks the app markets:

  • The iTunes app store earns four times as much revenue as the Google Play app store.
  • In October, Google Play revenues increased 18 percent while iTunes revenue sank 1 percent, lending credence to Schmidt’s assertion.
  • Japan recently overtook the U.S. as the country that generates the most Android app revenue.

So what about all of the patent litigation about “rounded corners” and everything else, currently ongoing in the battle between Apple and Samsung (not to be confused with Apple employee Sam Sung)? According to Schmidt, both Apple and Google will do fine after all of the patent litigation dust settles. Instead, the real losers will be any new mobile operating systems that try to emerge over the coming years, because they could find themselves locked out of the game (more on that).

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