Android vs iPhone: Market Share & Income Share

If you’ve been following the ongoing battle for control of the smart phone market, you’ll know that Android has grown and grown its market share year after year. 2011 is no exception:

Data from Gartner shows that Android now has a 52.5 percent share of the global smartphone market, up from 25.3 percent in Q3 2010. In contrast, iOS’s share has declined from 16.6 percent to 15 percent over the same period.

Though note that this does not mean there are less iOS phones being sold – far from it. The overall size of the market is growing, so a handset manufacturer can loose market share while selling more phones than before. So from a market-share perspective, Android looks the best place to develop for. However, as a games developer, I know that the size of the platform is just one factor. Users of different platforms behave in different ways. One title can be a hit on PlayStation and fail on PC (e.g. Warzone 2100). So it was with great interest I read this article on the Guardian’s apps blog on income share by platform:

Analyst Gene Munster has published a research note claiming that between its launch in July 2008 and the end of September 2011, Apple’s App Store generated 18.6bn app downloads with a total gross revenue of $4.9bn. By contrast, it estimates that since its launch in October 2008, Android Market has notched up 6.8bn downloads, but only $341.8m of gross revenues.

“In other words, it appears that Apple has roughly 85-90% market share in dollars spent on mobile applications,” writes Munster. “While Google has closed the gap in terms of app dollars spent over the last year and we continue to believe Android will grow smartphone share faster than Apple, we believe Apple is likely to maintain 70%+ share of mobile app dollars spent over the next 3-4 years.”

Munster also thinks that only 1.3% of Android app downloads have been paid apps – roughly 90m – compared to 13.5% for Apple’s App Store (around 2.5bn). He also estimates that the average Android device has 34 apps installed on it, compared to 71 for the average iOS device.

So by this data, because the users of iPhone are much more likely to spend money, the Android market share will need to be 10 times the size of the iPhone to make the same money from it. However, given the speed the Android market share is growing, that will happen… (Well worth reading the whole article!)