Android Apps Closing Rapidly the Revenue Gap with iOS Apps

An interview of Craig Palli from Fiksu provided some fascinating figures about how the value of iPad, iPhone and Android smartphone application users is changing as the device owner profiles shift and usage patterns evolve. Fiksu is one of the best-known mobile advertising specialists, with a client roster including brands like VH1 and Hearst Magazines. One of the most interesting trends popping up in the conversation with Mr. Palli was that two years ago, an iPhone user was worth more than twice as much as an Android smartphone user in revenue generation. A year ago, that lead shrunk to iPhone users being 50% more valuable – and right now, if the app is designed specifically for Android and some segmentation is considered, the revenue generation potential is the same.

This change coincides with the leading Android smartphone vendor, Samsung, pulling decisively ahead of Apple in smartphone volume sales and Google‘s attempts to improve the Google Play user experience in order to attract more high-value customers. As the Android market has consolidated around Samsung, the splintering problem that has been plaguing the ecosystem has shrunk.

Interestingly, the revenue generation gap between iPad and iPhone has been narrowing as well. According to Fiksu’s statistics, iPad owner is currently worth 20% more than an iPhone owner. In some app categories, iPad and iPhone now generate the same amount of revenue per user; casino applications being one prominent example.

Fiksu states that the average time consumers owning a smartphone spend on mobile apps daily is now hitting a remarkable two hours a day, up 50% over just one year. This could go some way towards explaining the harrowing recent declines in video game software sales and prime time network television audiences. Having achieved critical mass in their home countries, mobile brands are increasingly exporting their apps to new countries, according to Mr. Palli. The big Asian players such as RenRen, Tencent, DeNA, Gree and others are investing significantly in the US markets.

The rise of Android application market value relative to iOS app market is setting up a fascinating clash between the Japanese/Korean app vendors that dominate the Android landscape and the US/EU vendors that dominate the iOS market. The ones that cross over more effectively and rapidly to their secondary mobile OS may well be the app market leaders circa 2015.