Want to develop a smartphone app or two? First, you've got one major decision to make: iOS or Android? And how do you make that decision? With a combined global market share of 96%, competition between these two operating systems has intensified into an increasingly narrow ‘two-horse race.’
While iOS and Android each have their pros and cons, they are often compared in monetary value based on users’ app purchases. Since developers want to develop apps that generate revenue, it's important to recognize which operating system supports the most app buys. Perhaps no surprise here but recent reports indicate that on average iPhone apps make 5 times more than their Android counterparts, despite Android’s market share being four times that of iOS.
So, now the big question is why do iPhone users spend more on apps than Android users?
Device Engagement and Demographics
First off, let's discuss engagement. According to Experian, a a global information services group, iPhone users spend 26 more minutes on their devices in comparison with Android users. They also consume more data and spend more on mobile commerce on their iPhones.
Now let's compare this to Android, where the diversity of devices from budget phones to high-end offerings attracts different types of users, with varying engagement levels in usage. On average, Android users are more price-conscious, in fact price is the greatest contributing factor towards choosing an Android phone in the first place.
Of the 700 million Android phones sold in China in 2013, 57% of devices sold were under $330, and 35% cost less than $149. And studies show that the lower the price of the hardware, the less the user spends on apps and software. The ‘logical assumption’ is that lower-end users do not buy many apps because they are not seeking as much value out of their phone as a high-end Android or iPhone user does.
Meanwhile, 41% of iOS users earn at least $100,000 income, and tend to be early adopters that want more out of their smartphones. Greater levels of engagement suggest that iPhone users are deriving more value out of their devices, and are therefore more likely to pay for applications that increase the capability of their smartphone.
Brand Loyalty means App Loyalty
Another reason iPhone users spend more than Android users is due to their higher levels of brand loyalty. Turns out, iPhone users are incredibly loyal. A study by Consumer Intelligence Research Partners found that 81% of iPhone users who upgraded between June 2012 and June 2013 chose another iPhone, compared to 68% of Android users who upgraded to a newer Android smartphone.
App Pricing: Confirmation Bias or User-Savvy?
Experts say apps in the iOS App Store tend to more expensive than those for Android smartphones, which may also contribute to the greater amounts of overall iPhone app purchases. According to Flurry Analytics, in April 2013 the average price paid for an iPhone app was 19 cents and just 6 cents for an Android app. In fact, research by Stardust Testing found the average Android app cost less than half of average iOS app. For example, some popular apps such as Angry Birds and Tetris are paid apps on iOS but are freely available on Android devices.
However, whether some app developers follow this pricing pattern because Android users naturally spend less, or because they are informed by the perception of Android users spending less which leads to them selling lower priced apps in the first place it is a little bit like asking about the chicken or the egg. Studies from research firm Vision Mobile show that 30% of Android developers choose in-app advertising as a monetization option, followed by pay-per-download (26%). In contrast, 36% of iOS developers choose pay-per-download as the main revenue channel and 35% of iOS developers use in-app purchases to monetize their app.
The Times They Are a Changing?
Over the years, the popularity of paid iOS apps has waned, when it once accounted for 74% of apps in the 2008 App Store. Now, 90 percent of App Store offerings are free. Meanwhile, the Google Play Store is now beginning to see increased rates of purchased apps, thanks to an improved and streamlined buying process which includes pre-paid credits and gift cards.
Apps of Future Past
Although iPhone users have historically spent more on apps than Android consumers, recent trends indicate that this gap is narrowing. Where apps have once been a key differentiator between the operating systems, user satisfaction on both iOS and Android is now leveling to an equal plane. The creation of apps has helped to shape and in turn characterize the user experience on both platforms. As the app marketplace matures, we'll be watching to see how this will be reflected in future buying habits of users on iOS and Android.
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