What’s a Better Business? iPhone Apps vs. Android Apps

What’s a Better Business? iPhone Apps vs. Android Apps

Over the past couple of days I have been researching the mobile phone app business.  One of the first decisions that I need to make is simply which platform do I want to target.  Do I want to build something on the iOS (Apple iPhone, iPod touch, iPad) or the Android operating system?  Clearly the iPhone made a big splash a few years ago and essentially paved the way for mobile phone developers; however, Android powered phones are quickly overtaking the iPhone.  So, its not a simple decision.  Overall, in today’s post I am going to discuss several different aspects to help me determine whether I should build an app for the iPhone or Android powered phones.

First, its important to realize that when you compare the Apple iPhone with all Android powered phones, you are not really comparing apples to apples (hee hee :) ).  The iPhone is a phone and Android is a Google operating system that MANY different phones are powered by.  However, I will be doing a general review of the market share and growth potential of both to help determine where I should put my focus.

Current Market Share of iPhone vs. Android Phones

Since Apple is a public company – we know exactly how many iPhones they sold in the first quarter of 2011.  They sold 16.24 million iPhones in the first 3 months of 2011 according to their first quarter report.  This is an 86% unit growth over the first quarter of 2010…wow!  So, if we multiply 16.24 by 4 – we can easily project that Apple will sell nearly 65 million iPhones this year (they will probably sell much more if they are anywhere near their 86% growth rate).

Because Google Android powers lots of different phones, its difficult to know exactly how many phones were sold.  However, we do have some overall projections into the market share of Android.  According to ComScore, Android powered phones make up 33% of all cell phones.  This is more than the iPhone share of 25.2% of the market.  In addition, Google Android phones had a growth rate of 7% since Nov. 2010 compared to only a 0.2% growth rate for the iPhone.

So, in reality Google Android phones command a larger market share AND they are growing at a faster rate.  This makes a pretty strong case for focusing on Android phones.  However, what does this mean for the mobile phone application market specifically?

Who is Downloading more Apps?

Its one thing to have more users, like Android does – but its a completely different matter trying to determine which market is making more money from applications.  According to Wikipedia, there are over 350,000 apps available in the Apple App Store and there have been over 10 Billion downloads to date.  I can’t really wrap my head around the enormity of that number.

According to Androlib, (which keeps a live count of Android App downloads) there have been 4.32 Billion Android App downloads at the time of this article.  So, iPhone users have downloaded more apps overall, but Android is catching up (it got a late start compared to the iPhone) and its market share is growing quickly.

Also, this article states that Android users vs. iPhone users download almost the exact same number of apps on average.  However, where is the money being made?

Which App Stores Bring in the Most Money?

So, overall we can see that iPhone apps have had more downloads – but Android phones are catching up.  However, what we really want to see is where most of the money is being made for app developers.  According to a report released by IHS Screen Digest in February of 2011, the Apple App Store is the clear winner in Revenue brought in.  The Google Android Market is not even close.  Check out this graphic:

In 2010, the Apple App Store brought in nearly $1.8 Billion in revenue compared with only $102 million in the Google Android Market.  However, the Google Android year over year growth is the highest.  So, the Android is indeed catching up, but its still no where close to the Apple App store in terms of money made.

This of course doesn’t take into account ad revenue made by developers on free or paid apps.  But it does mean that overall, more money is being spent on iPhone applications by far than money spent in the Google Android Market.  There are probably alot of reasons for this; some of which may have to do with the fact that every phone running on Android is different.  Apps will work differently on certain phones (as I understand) and so the market is less centralized.

My Decision

So, overall its clear that both options – iPhone apps and Android Apps have great growth potential and both are great markets.  However, the iPhone Apps Store is still the dominant player here.  Despite the fact that Android powered phones have a larger market share of users and app revenues are growing at a faster pace; the iPhone market is just too big to ignore right now.  For that reason, I will be focusing on building an iPhone application for my little journey here on the blog!

This also means that I need to buy an iPhone!  I currently don’t have an iPhone, but if I am going to be building applications for it – I certainly want to have one so I can test out my own creations!  So, in the next little while, I will most likely be picking up an iPhone.  Luckily Apple just recently started allowing Verizon users, as I am an existing Verizon Wireless customer.

Next, I will start looking more in depth into the iPhone App store and some of the ins and outs that I need to be aware of before I start hiring any programmers.  In addition, I have jotted down 7 or 8 app ideas and I will continue to write down several more as part of the brainstorming process.  Anyway, I will be sharing my brainstorming process and the other things I research as I get closer to actually creating a solid plan to get into the iPhone application development business.

Your Thoughts

What do you think of my analysis of the iPhone and Android markets?  Do you agree that developing iPhone applications is still the better business opportunity?  Let me know if there is anything else you would like to see discussed here…thanks!


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26 Comments for this entry

  1. Dino Vedo says:

    iphone definitely is the winner here my man!!

  2. Henrik says:

    The Apple appstore is where the money is right now, but the competition is more fierce there also. One could probably get a greater market share on the Android market with a good app, than on the iPhone market where it seems everything is already done. My gut feeling is that the Android market and app sales are going to continue their growth, so the future may lie there. Most of all I think it is the app itself and the marketing that will determine how much you make on it.

    • Spencer says:

      Henrik – I agree with you on this point. There is definitely more competition on the iphone side. I also agree that the Android market is going to continue to grow – both markets are attractive. Luckily, the idea is to create multiple apps if the first few show promise – so maybe I will dive into the Android market later – but Im trying out the Apple market place first.

      • Boris C. says:

        What Henrik said reminded me of “low hanging fruit” if you know what i mean. If you create app there now and it will become most downloaded app (hopefully) then soon others may start copying your idea and in 5 years from now where Android store will grow at least 10 fold there will be many similar apps created that it will become too competitive and app will hardly make okay money.

  3. Bill says:

    “What do you think of my analysis of the iPhone and Android markets?”
    Seems right to me, you want downloaders not just phone owners.

    “Do you agree that developing iPhone applications is still the better business opportunity?”
    Sure looks that way. And according to what you have found out so far, yes!

    Spencer, have you been impressed by any ebooks/courses you’ve come across that cover this business? If so, which ones and why?

    Great job. Thanks.

    • Spencer says:

      Thanks for the feedback Bill! I did order a book off of Amazon called “App Savvy” something… I linked to it in my last post. However, I want to look at a couple of books or courses before I make any recommendations.

  4. Adam H says:

    While the iPhone clearly dominates in sales, the Android market is smaller, thus less saturated with similar apps. As an Android user (evo) i know that when there is a cool new app, users flock to it. I am probably a bit biased though. Regardless, if you build a superior product, users, whether they are iPhone or Android, will buy it. Goodluck! I can’t wait to see your results as I have several ideas I’m sitting on.

    • Spencer says:

      I agree – the Android market is attractive for the very reason you mention. Hopefully I can create a good enough app or a “niche” enough app that it will be different from the crowd on the iPhone.

  5. Boris C. says:

    iPhone seems like no brainer but what are the fees of selling apps in iPhone and Android stores? I believe currently that iPhone is leader in downloads, Android will keep fees low until it catches iPhone store.

  6. Interesting analysis-there was a dude selling some product about creating apps..I think the Australian guy was promoting it big style..cant remember his name but he does that 40 day challenge thing every year

  7. Michael lee says:

    I’m not familiar with how the Android marketplace works, but if it’s anything like the App Store, ranking is a huge factor in how successful your app is. It’s similar to ranking on Google, where being listed as a top 10 app in an ITunes subcategory will drive a huge amount of traffic/purchases. You’ll want to keep in mind this parallel with your SEO/adsense business when drawing up your business model.

    Another issue is that your analysis doesn’t include your niche idea. If I asked you in what city I should open my retail store, the first thing you would ask me is “what will you sell?”. As a developer myself (not a mobile app dev though), I find the choice of platform is closely tied to the application and its intended market. For example, I’m not going to develop an application for senior citizens on Linux. Since Android and iOS may not be THAT different in terms of demographics, looking at the competition might be worthwhile for you. Your great niche idea might have 10 free, polished, mature apps on iTunes but no competitors on Android. The choice in that case is pretty obvious

    • Spencer says:

      Michael, I agree – you make some great points. I really like comparing it to search engines. In a way, I view the Apple store as the “Google” of app stores – the dominant player – and Android as the Bing or Yahoo. I still feel like because the traffic is with Apple – that’s where I want to be. Now the key is to do what I have done with my niche websites; which is to find a unique way to rank well for my offerings.

      I will have to do some serious research into category listings and other methods of getting eyeballs. But since I know the most eyeballs are pointed at Apple right now – I will focus on that. But I totally agree that there might be some low competition opportunities on Android. After testing some things out, I may ditch Apple and go with Android after I try a couple of apps – who knows. I will keep an open mind about it.

  8. Toni says:

    I think iphone apps get better than android

  9. Claudio says:

    Hey Spencer, let me pinch in. I read in a business magazine and heard yesterday on the radio (I think was tech crunch over internet radio). Android is the way to go. The projections are a lot better for android because the system to approve them is a lot faster (to be live on their store) and the way they organize them makes them more easy to distribute.
    The guy on the radio was talking about the growing speed of android apps was steady.

    • Claudio says:

      One more thing. My previuos comment is 100% what I heard or read not my own opinion. The internet radio guy was a tech reporter and was also talking about facts and projections. This can give you an angle in your choice.

      Personally, I spend so much time w/my computers at home that I do not use any phone with apps nor plan to use. I turn off my phone when spending time with my family and have all my email accounts go to my laptop :)

  10. Carl says:

    I think you can’t go wrong either way. Both have their own advantages. The important thing is to make your decision and concentrate on your choice. looking forward following your journey.

  11. Kevin says:

    Great post… I am watching closely as I am currently defining two apps that I want to start out sourcing. The one quote I don’t agree with would be “The iPhone is a phone and Android is a Google operating system that MANY different phones are powered by.”. Are you considering the tablet market at all for your apps? iPad? Xoom? This is another market that is going to drive growth.

    Also, in case you aren’t up for a contract renew yet with VZW, don’t forget an ipod touch is always an option for test as well.

  12. Billy says:

    If you develope an iPhone app can it easily be sold on the ipad too, or is it a completely different process?

    • Spencer says:

      As I understand its based on Objective C – the same programming language. So, its probably fairly easy to convert an iphone app to an ipad app. The difference is the screen size/resolution etc.

  13. steve says:

    Great post…I’ve been thinking about this too.. Your article is right on time. I’ve also been looking at the Chrome App and Mac App options..a growing segment too..

  14. Angry Birds says:

    I would go for iphone games as they are much more popular.The iphone app platform is the breeding ground of all top apps which are later on distributed on secondary markets like android and windows phone.

  15. Paul says:

    Another alternative, depending on what capabilities you need, is a mobile enhanced web-based app. A few advantages include the cost of getting the app placed in the stores, development cost could be lower since more people are likely to know how to program html, etc., and it would not only be available to both platforms mentioned, but also desktop.

    The one thing I haven’t dug in to is exposure. Could you drive people to finding a web-based app at the same rate as you could in the app store?

  16. I think iPhone app store is the better place to earn more money because the apple store is getting more and more downloads. so if you are a application developer just try to develop the iPhone apps which has more demand in the market and put that in the Apple store.

  17. Barath says:

    Hi,
    I totally agree with your points. Our analysis also says the same. Check this out http://www.omate.com.au/blog/launching-your-first-app-iphone-or-android/

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