Why Android devs are losing money, and it’s not due to piracy

I haven't found any Android apps worth buying. I look through the paid apps section now and again and it seems to be very utility-centirc. I'm not going to pay for a backup tool, file manager, ROM manager, over-clocking utility, task manager, etc. Of course you don't have to. The free versions of these apps are good enough. Then you have an assortment of weather apps, alarm clocks, etc. Again stuff that just doesn't justify even 99 cents to me. I don't keep up on exchange rates so I generally won't buy anything that's listed in Euros because I'm not sure if it's worth it or not. For games the #1 game, Robo Defense, doesn't even have a screenshot so there's absolutely no chance I will buy it. 2 of the other apps in the top 5 are emulators that will require me to go find ROMs. The Android market just kind of feels like a bad Windows shareware site to me. It's lacking instant gratification.

Before poo-poo'ing the idea, consider that a conspiracy isn't required for Google to be unconcerned with paid app sales. Android only exists because Google was afraid of being cut out of mobile search advertising. Their priority has been getting a competitive OS with a prominent Google search box on as many handsets as possible. Paid app revenue is something of a sideshow. (Even with paid apps, Android isn't going to turn a profit in the short term, so why worry about minor revenue streams?) I'm sure Google doesn't <i>want</i> a shitty, disorganized app store that can't collect payments or rampant piracy, but they aren't exactly hurting Android yet, so why should they worry about it?<p>Edit: Even worse, Google apparently doesn't get <i>any</i> revenue from paid app sales. Their 30% cut goes to the carrier. (Thanks gregholland!)

Google also has a vested interest in keeping as many apps free as possible. Most free apps makes use of Admob (Google) as their primary source of revenue, this means that Google gets a cut of this. But for paid apps, the 30% that gets taken away from your sales goes to the carrier instead and Google does not see a cent of this. Therefore by limiting the number of countries from which developers can publish apps, as well as the countries where paid apps are available, Google is actually boosting their own profits.<p>I have almost given up on the Android market, Looking forward to MeeGo and Win7mo.

Although you CAN buy apps on the New Zealand market place, as a developer in New Zealand, you CANNOT sell any apps!<p>As a developer you need to be in Austria, France, Germany, Italy, Japan, Netherlands, Spain, United Kingdom or United States to set up a merchant account.<p>I had an email conversion with Tim Bray about this...<p>He said: "I hear you. We're working on lots more countries. It's an amazing amount of work to do each one. -Tim"<p>But did not indicate any timeline :(

It is just as big a problem or perhaps even bigger that hardly any countries are allowed to <i>sell</i> apps. It means there are millions of developers with no option to put a price on their apps. So what do they do? they make free apps that compete with the paid apps. The free apps aren't always as good as the paid ones but they still bite into their revenue because for some reason people will irrationally put up with a lot of crappiness to save 99c. And they'll conclude that apps on Android are crap at the same time, hurting the Android brand which hurts all the paid app developers all over again.<p>The result is the quality of apps is poor and profits are lower across the board.

Google thinks they can have lightning hit the same spot twice .i.e. crowd sourcing. It worked with Google Search but for the Android platform, Google will have to actually do some PR work. As an android developer, I got pretty frustrated by the lack of clear documentation and their horrible API. Chances are, if you are used to the Sun Java API (or even C# API), trying to develop in Android will easily get your frustrated with the Android API. Method names sound alien or don't really mean what they imply. Also, the whole XML resourced-based format prevents you from easily creating components dynamically (through java code) and referencing them in more than one project.<p>I could go on and on...<p>Even the Developer portal on the Android Market is just horrible. I'm not sure what they were trying to accomplish.<p>- 2 screen shots???<p>- extremely limited description?<p>- No clear text box for "Update Reason"?<p>- You can't respond to user ridiculous comments?<p>- Sometimes my paid apps get cancelled after two days of purchase<p>P/S: I have more than 1/2 million combined downloads

I'm an android guy, but I bought an iPad recently, and I think the author's missing a huge chunk of the issue here: Design &#38; Culture. There is a big, big difference between how Google &#38; Apple handle paid-for purchases - on Android, you get a confirmation screen, you have to verify the purchase, and you get 24hrs to return it. On iOS, you press a button and the app starts downloading. It's almost frighteningly fast - no confirmation screen, no returns, Congrats, and enjoy your $10 app. Psychologically, these are very different experiences, and I think they push users to spend more on iOS than android.<p>There's also a difference in average price points and expected prices - the android is absolutely cheaper. I think this is partly because the iOS marketplace is more mature, partly because big companies are not totally committed to android yet ("Testing the Market" price, not "Making Money" price), and partly self-reinforcing.<p>Whatever the cause, though, it's just flat out Easier to spend more money on iOS, and I suspect THAT's why Android devs aren't making what iOS devs are.<p>Mind you, I think Google's model is more consumer-friendly, and I endorse that, but the flip side to that coin is that Devs aren't making as much money, and that might hurt the platform in the long run.

This is not a new problem. It was an issue for Valve with piracy of their games in the Russian market. So they decided to actually sell their games in Russia and it went a long way to reducing piracy of their games in that market. People will get things as soon as they can if they want it. For instance, fansubs of anime and foreign films are pretty popular and widely circulated. If that means stealing it then they will.<p>[0] <a href="http://www.eurogamer.net/articles/valve-we-dont-worry-about-piracy" rel="nofollow">http://www.eurogamer.net/articles/valve-we-dont-worry-about-...</a>

Speaking from my own iPhone App Store experience, the US, Australia, Canada and the UK are by far the biggest customers, with the US obviously having by far the largest single installed base, and therefore the largest demand for apps.<p>If these countries are covered for buying Android apps, and per the article they are, then Android should be doing just fine.<p>For this reason, I'd disagree with the premise that the Android marketplace problems are caused by not supporting paid apps in countries that are marginal buyers at best. It seems much more likely that Android apps get pirated, simply because it's relatively easy.<p>I'm interested in writing for Android, but I'm holding off until I see some evidence that the Google DRM actually works and allows application writers to be paid for their work.<p>edited to give my reasoning on why I respectfully disagree with the article. ;)

Payment friction is the enemy of many plans. If you don't account for it in your model, prepare for possible doom.

Maybe Google is hoping that someone will fork the app store side of things, and it won't be their problem anymore?

Couldn't other app stores step in to fill the gap?

Here's some information about the Android installed base by country.<p><a href="http://www.techinfospotlight.com/2010/05/phone-os-market-still-twice-as-big-as-android-in-us/" rel="nofollow">http://www.techinfospotlight.com/2010/05/phone-os-market-sti...</a><p>The big takeaway for me is that 75% of Android phones able to access AdMob are in the North America, versus about 50% of iOS installed-base in North America!<p>Quote: "Over half of Apple’s sales are now outside the US. AdMob’s figures indicate 49% of the iPhone OS devices reaching its advertisement network are in North The united states, while 28% are in Western Europe, 14% are in Asia &#38; 10% are elsewhere around the globe. For Android, a whopping 75% of the installed base visible to AdMob are in North The united states, with only 11% finding their way to Western Europe. A similar 12% are present in Asia, while less than 3% are in use elsewhere on the globe."

What is the spread of third-party Android markets? Are there any that are set up to work in nations that the official app market doesn't support yet?

In a similar vein, some of the best apps are made by non-US developers, but neither of my [American] credit cards works buying apps in non-USD.<p>(Not sure if Apple has the same limitation, or whether they "solve" that problem by only showing American apps, but I never ran into it there.)

"<i>Paid Android apps are [ only ] available in the following countries: Australia, Austria, Canada, France, Germany, Italy, Japan, Netherlands, New Zealand, Spain, Switzerland, United Kingdom, and the United States.</i>"<p>Yikes!