Apple Lags in Apps Sold, Leads in App Gold
When does coming in second mean winning the race? When it involves application revenue vs. app units sold, as seen in a new report totaling sales from all four major mobile app stores. The wealth of Android devices is a tough mountain to climb for Apple, but the company's pioneering efforts at creating a seamless user experience result in more money made from mobile games and productivity services.
Apr 10, 2013 5:00 AM PT
Apple's App Store may not sell more apps than its top competitor in the space, Google Play, but it is gaining more revenue from its sales, according to research from Canalys.
The research firm found that app downloads across the four major stores -- Apple App Store, Google Play, the Windows Phone Store and BlackBerry World -- are up 11 percent worldwide during the first quarter of 2013, compared to the same time a year ago.
App downloads jumped in emerging markets such as Brazil and South Africa, and remained healthy in mature markets like North America, indicating that consumers aren't growing tired of adding games, features, productivity helpers and services to their smartphones and tablets.
Google actually snagged more of a marketshare than the Cupertino company, with about 51 percent of the downloads. That shows the race between the two tech giants for smartphone sales isn't only about units shipped, said Brian Collins, account executive at Appency.
"It's not surprising that Google has more downloads, as Android device sales have made significant strides against iOS devices in the past six months," he told MacNewsWorld.
Better at Monetizing
Even with the rise of the Android operating system, however, Apple earned 74 percent of the proportion of revenue between the four major app stores, an edge the company has always enjoyed in regards to monetizing its ecosystem, Collins noted.
"In regards to revenue per user, Apple has always held the edge on this," he said. "While most point to the fact that on average iOS device owners have more money to spend then Android users, it may also have something to do with offering a full suite of digital content."
For instance, said Collins, Amazon's App Store also has a much higher revenue per user than Google Play does, because both companies have made sure their consumers have grown accustomed to clicking to pay for content -- unlike many Android customers.
"Both Amazon and Apple have users who are used to paying for movies, music and magazines. You could then make the reasonable assumption that they are more amenable to paying other digital content in the form of in-app purchases and premium app prices as well," he added.
However, just as the smartphone market is evolving, so are smartphone users, Collins noted, meaning Apple might have a closer competitor with Android as its customers become used to paying for content.
"As Googles users use Google Play more and more as their one stop shop, these numbers may begin to come closer together," he said.
No More One Size Fits All
It's unknown when Apple will launch the newest version of the iPhone, but that doesn't stop rumors from spreading about how the next model might differ from its predecessors.
One of the latest hunches from analyst Brian White of Topeka Capital Markets has suggested that the company's next-generation iPhone will launch with more than one screen size.
Apple is realizing it is in its best interests to diversify its offerings, White said.
Apple has only changed its display size once, and it has only ever launched with a single model of its smartphone. Its most recent version, the iPhone 5, has a 4-inch display, slightly larger than the 3.5-inch screen for the previous models.
White did not specify the different sizes that Apple might make, but it has compelling reasons to go both bigger or smaller.
If the company goes larger, it could have a model more in line with the popular Samsung Galaxy series. Its 5-inch screen is sometimes referred to as more of a tablet and smartphone mix. Building anything smaller than the current 4 inches, which would likely be more affordable, might appeal to customers in emerging markets like China and India.
However, if Apple does stray from its past strategy and launches with more than one display size, t it probably won't go any smaller, said Ramon Llamas,senior research analyst with IDC Mobile Devices Technology and Trends.
"There are a lot of challenges to make a smaller screen," he told MacNewsWorld. "It's easier to just say, 'here, an older phone' and drive the price down on that as much as possible. It's a more viable approach, because the more different kinds of devices you have, the more demands are placed on putting them together."
Still, the smartphone market is only growing larger and more diverse by the day, and it's no surprise that Apple would want to make devices that would appeal to as wide a consumer base as possible, Llamas said. If a smaller device would compromise the iPhone experience, though, it might be a sacrifice the company is unwilling to make.
"It's a good idea to grow margins and stay out in front," he said. "But you're also looking at some diminished experiences. People read books on their iPhones, and it's tough to do that on a smaller screen. There are a lot of questions on the practical side."
Apple did not respond to our request to comment for this story.