It's long been true that while Google's Android mobile operating system captures more users than does Apple iOS, people with iPhones spend lots more money on apps than do Android users.
App Annie's 2015 Retrospective makes it clear that that dichotomy is only deepening over time. And that growing separation could presage very different business models for the two mobile ecosystems going forward.
Android users downloaded apps, iOS users spent money
2015 "was a banner year for the app ecosystem," App Annie said. "Subscription monetization proved successful for video streaming, music streaming and dating apps. Games, ridesharing and m-commerce also continued to grow in downloads and usage."
But Apple and Google cashed in on this surge via very different metrics. For Google, it was all about the downloads. Google registered twice as many app downloads as Apple did during the year. That almost doubled Android's lead from 60% in 2014.
On the other hand, according to published reports, Apple's App store earned more than 75% more money in 2015 than Android did in the Google Play store. And amazingly, that lead also widened from 2014!
Not surprisingly, Google growth came largely in emerging markets such as Brazil, India, Indonesia, Turkey, and Mexico, while iOS derived more revenue in China, as well as in more developed markets such as the U.S. and Japan.
Can Apple sustain this approach with iOS?
While some may quibble with App Annie's methodology—it tracks only downloads that include its software, not those built into the various OSes—the trends seem pretty darn clear: Apple makes money by selling phones, and then selling apps to the people who buy those phones.
Google, on the other hand, has its OS on lots more phones than Apple does, but doesn't make much money selling Android phones. And it makes much less money selling apps to the people who buy Android devices than Apple does selling apps to its own users.
And yet, Oracle recently claimed that Google has earned some $31 billion in revenue (and $22 billion in profit) on Android since 2008, mostly on mobile advertising. Sure, iOS users are still richer and more willing to spend than Android users overall – and that makes them a more attractive market for secondary mobile spending.
That's why most app developers, especially ones who plan to sell their apps, still usually choose to develop for iPhone first. But for things like advertising and mobile commerce, sheer numbers really do matter. Eventually, if Android continues to dramatically outdo Apple in overall adoption and app downloads, Apple's focus on the high-end of the market could end up isolating it and cutting it off from the most popular trends.
We're not there yet—and we may never get there before changing technology and trends make the point moot—but trying to extract more and more revenue from a smaller and smaller slice of the overall market raises some questions about the long-term sustainability of Apple's approach.