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Distimo: Apple's App Store Still Beats Android On Revenues; Freemium Rules

Android’s Market and the App Store from Apple (NSDQ:AAPL - News) may be getting ever-closer to being level in the number of apps on offer, but when it comes to making money for developers, it looks like Apple’s iPhone app storefront is still very much in the lead. And freemium looks increasingly like the order of the day when it comes to making money from mobile content via apps.

The latest figures from Netherlands-based app analytics firm Distimo notes that Apple’s App Store for iPhone generated four times as much revenue as the Android Market when it came to the top-200 apps.

Although app stores are very much an exercise in long-tail content, this does still point to the Apple storefront as a better guarantee for returns for those developers looking for a big hit.

It also explains why so many app publishers still look first to iOS when developing an app, even as Android pulls ever further away from the competition as the most-popular smartphone platform in terms of devices sold worldwide.

Distimo’s annual app report also points to a rise in “freemium” apps—those that are free to download but then make their money on offerings within the apps themselves, either in-app purchases to unlock levels in games, or other kinds of extra content.

Distimo notes that in the App Store, half of all revenues for the top-200 apps came from those apps with freemium models built into them. In Android, that figure was 65 percent—which could also point to the fact that longer term Android may well end up as the bigger revenue generator, even if today it is not.

Some other implications from Distimo’s numbers for all platforms. If the trend towards freemium continues, it could mean that apps that cost something to download/install may possibly turn out to be a less popular route for developers. It also raises the question of whether advertising will be as strong of a revenue generator for apps compared to direct purchases for content within the apps themselves.

What’s also worth noting is that as in-app purchases rise within the apps that also benefits companies like Google (NSDQ:GOOG - News) and Apple, which get a cut on those revenues.

China. Unsurprisingly, the market for apps in China is still booming, and it’s not just about Android figures—although these seem to be the ones we hear about most because of the proliferation of Android app stores in the country not operated by Google itself.

Distimo notes that for the Apple App Store for iPhone, China represents 30 percent of all downloads when you combine the total number for China and the U.S. On the iPad, China accounts for nearly half (44 percent) of all downloads across the two countries.

In effect that points to China slowly becoming one of the most important markets, if not the most important, when it comes to apps for those devices. No surprise then that Apple recently finally made it possible for people to actually pay for apps and in-app payments via the local currency.


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