Can developers survive in Android Market?

Half of iPhone users and 40 percent of iPod Touch owners download one or more premium applications each month, compared to 19 percent of Android smartphone users, according to mobile advertising network AdMob's July 2009 Mobile Metrics Report. That translates to about 26.4 million iPhone users and 18.6 million iPod users purchasing software from Apple's App Store, compared to just 5 million users downloading paid apps from Android Market--according to AdMob, the disparity in revenues between the two platforms is even greater, with iPhone and iPod touch apps generating a combined $198 million revenues each month, and Android Market yielding just $5 million monthly.

While the number of applications available via the App Store continues to dwarf Android Market's inventory, the enormous revenue schism between the two storefronts is still alarming. Here's another shocker: Android developer Larva Labs speculates that AdMob's Android revenues estimates are probably a bit high. Writing on the firm's blog, co-founder Matt Hall admits Larva Labs' Android app revenues averaged just $62.39 per day in August--"very difficult to buy the summer home at this rate," he adds. Larva Labs' apps aren't exactly languishing in obscurity, either: "Our two best selling games have been ranked and are currently ranked pretty highly on that hard to find list of paid apps," Hall notes. "RetroDefense was #1 for a while and is currently around #12 with a perfect 5 star rating. Battle for Mars is currently #5 overall with a 4.5 star rating. Both of these games are selling for $4.99, which is on the upper end of the price range. Finally, both of these games have been featured by Google in the market app and on the Android website."

Nor is Larva Labs the lone developer struggling to break even in Android Market. Hall cites the example of Demiforce's hugely successful iPhone puzzle game Trism, which raked in more than $250,000 in its first two months in the App Store. So Demiforce ported Trism to Android Market, where the title has sold fewer than 500 copies to date. "That's $1,046 total earnings, max," Hall contends. "How psyched are those guys that they ported a huge hit to Android and can't even cover a party sub for the release dinner? By comparison, if you were an iPhone developer with a game in the #5 spot, you'd likely be earning around $3,500 a day (based on recent numbers from tap tap tap)."

It's anyone's guess whether Larva Labs' experience is typical of the average Android developer's struggle, but Hall speculates that given RetroDefense and Battle for Mars' respective positions on the bestseller list, the firm is probably on the high end of the earnings curve. Although Hall points to a number of fundamental flaws undermining Android Market's potential--the absence of app screenshots, failed and stalled downloads, and credit card verification delays among them--the relative scarcity of Android devices appears to be the primary culprit behind its negligible download rates, and until more Android smartphones hit retail, the situation is unlikely to improve. "I'm sure Android will be on a lot of phones at some point in the future," Hall concludes. "Whether it'll be possible to target it profitably as a small developer, I'm not sure." Me neither. -Jason

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