The iOS and Android App Economies
I try my best to avoid writing sensational headlines for my pieces here.1 I slipped, though, with my piece on the differences between the Android and iOS app markets two weeks ago. “Where Are the Android Killer Apps?” was too broad.
Context & Ripple Effects
Two weeks after asking where the Android killer apps were, Daring Fireball widens the lens: the interesting difference between the two platforms is not any single missing title but the shape of each app market — what developers earn, what users pay, and why hits happen where they happen.
The arc matters: by late 2010 Android held the top US smartphone OS spot per Gartner and roughly 25% of US mobile web browsing per Quantcast, while TechCrunch asked whether Android was surging only because Apple was letting it and Scoble argued iPhone apps now take off without the tech press. This piece is the year-end synthesis question underneath both: does install-base share actually convert into a functioning app economy?
First-order effects
- Developers choosing where to ship face two visibly different businesses: an iOS store where premium pricing and concentrated launch attention produce hits, and an Android market whose large and growing user base has not shown comparable per-user spending.
- Apple and Google each get a clean test of their store models at the moment Android leads US smartphones, since app-market health is the counterargument to raw share numbers.
Second-order effects
- Handset makers and carriers betting on Android — the confirmed shift of major players toward the OS through 2010 — inherit an ecosystem whose app economy lags its footprint, handing Apple a quality-and-curation story to sell against volume.
- Developers hedging across both stores put pressure on whichever platform offers lower friction and better terms, making store policies and payout structures a live competitive lever rather than background plumbing.
Third-order effects
- If the pattern holds, mobile splits structurally into a scale economy and a monetization economy, and platform competition shifts from unit-share bragging rights to who can claim developers actually make money there.
- Security findings already in the record — roughly 20% of sampled Android Marketplace apps exposing access to private information, and a confirmed SMS-forwarding app — push centralized review versus openness from philosophy into explicit market positioning between the two stores.
The trend: Mobile platforms are splitting into a scale economy built on Android's share and a monetization economy built on iOS developer earnings, forcing developers to run the two stores as distinct businesses.