App Annie has released its regular report on the two main app stores in the mobile world - the Google Play Store and the iOS App Store. Given the two handset markets, it shouldn't come as a surprise that there are more downloads from Google's store than Apple's. What is more interesting is that the worldwide revenue figures are almost the exact opposite, with Apple's App Store revenue nearly doubling that of Google's.
This needs to be read alongside the market share numbers. In terms of volume, Android's market share is four times higher than that of iOS (depending on the territory, it's a little bit closer in the US market). If all is equal, the numerical advantage within Google's platform should allow it to dominate both the app store 'downloads' and 'revenue generated' charts.
Instead Apple's iOS platform is far more efficient at extracting money from its user base and controls the latter. And that is arguably by design. Apple's handsets are expensive, and demand a commitment from anyone buying in to the platform.
Even at the lowest reaches of Apple's portfolio, the recently released iPhone SE is a $400 phone when you look at the SIM free price. This is not a lower-tier handset designed to get market share, it's a smartphone that Apple must surely consider as its minimal viable product in the smartphone market. It has just enough power, capability, and specifications, to work with the current vision of Tim Cook and his team.
You have to make a conscious decision to buy an iPhone and to make sure you have the available funds to do so (even the new SE). And while it might not be part of their consideration, the fact that these consumers have a higher disposable income means that they are far more likely to go about purchasing apps, picking up in-app orders, and engaging with subscription-based media.
Apple's strategy of keeping an air of desire around the iPhone ensures there will always be a demand for the iPhone brand. This keeps prices high, which enhances the luxury appeal. And while there will always be the second-hand market and familial hand-me-downs, the general rule of thumb is that iOS owners are in a better place to invest in the third-party app ecosystem.
Tim Cook has consciously changed the handset market to push the message of applications on the iPhone as the gold standard.. Apple has developed its own application to help move users and their data from Android to iOS, and the ever-widening portfolio of Apple devices offers an equivalent handset for each of the major mid- and high-end handsets that Android defectors may be familiar with. Apple is pushing hard to bring over the high-value customers from Android, weakening Google's position and strengthening its own.
That might not be the Apple that people expect, but it's the Apple that people have. It's the Apple that gives developers an option to work with a highly engaged and cash-positive audience, as opposed to the more rock and roll nature of Android. And it's the Apple that dominates the mind share of up and coming consumers.
Android may have the largest market share and the biggest addressable user base, but sometimes efficiency is more important than having the biggest number.
(Now read twenty-five reasons why Apple is taking a chance on the mid-range market with the iPhone SE).
