Apple is still, by far, the leader in app revenue, with its App Store besting its rival Google Play by over 350% last month, when it had $333 million in revenue. But Google is starting to catch up, seeing some mighty impressive growth last quarter, all thanks to some major success in Asian countries.
In the fourth quarter of 2012, both the iOS App Store and Google Play saw increased app revenue, with Google's revenue soaring 100% and Apple's revenue only growing by 20%, according to the January 2013 index released by App Annie on Wednesday. This means that Google Play is gaining revenue at a rate five times faster than its rival.
App Annie compares revenue numbers using what it calls "The Revenue Index metric," where the baseline data point is typically set to an index value of 100. This means that if one month has a Revenue Index of 100, and the next has 80, the second month had only 80% of the revenue of the first month. The index does not provide specific number of revenue, only the percentages.
Despite Google Play's more accelerated growth, though, the App Store still had over three and a half times more revenue then Google Play in December.
It should be noted that it is perhaps a little unfair to compare the revenue brought in by Google Play and the App Store in December, as it is probably an anomaly, considering that it was a record month for Apple. App Store revenue went up by over one third from November to December, no doubt driven by a record setting holiday week where 1.76 billion apps were downloaded.
As you can see in the first chart, Google Play still had a long way to go to start equaling the App Store in revenue, but the gap between the two stores was smaller in the proceeding months and I would guess that it will narrow again in the months ahead.
So, what is driving this very impressive growth for Google Play? Asia. More specifically, Japan and South Korea, which contributed nearly half of Google Play’s app revenue in Q4.
In December 2012, Japan and South Korea were the first and third highest ranking countries in terms of total app revenue on Google Play and were also in the top three in amount money spent on games.
In the United States, 76% of Google Play app revenue came from Games. In Japan, that percentage was 88%, and in South Korea a whopping 95% of Google Play app spend went toward games.
The impact that the Asian markets are having on Google Play's revenue, simply look at the list of top publishers by revenue in December. Only one, French publisher Gameloft, is not either Japanese or South Korean.
Of course, Apple is also beginning to gain in Asia. Not only did Japan deliver the second highest revenue in the quarter, but China has been moving ahead in the ranks as well, going from eight place to seventh in October, and then up to sixth place in December.
App Store vs Google Play
In September, Google Play celebrated reaching 25 billion downloaded apps.
Since Google has been selling apps in one form or another since October 2011, that means it took three years and 11 months to get hit the 25 billion download milestone. In comparison, Apple, who hit the 25 billion download mark back in March, beat Google by a few months, taking just three years and eight months to get to the same number.
Google play is the home for 675,000 Android apps, while Apple announced during its iPhone 5 unveiling in October that it offers 700,000 apps, 250,000 of which are specifically for the iPad.
Apple also announced during the unveiling that it had sold 400 million iOS devices, while Google has activated over 500 million Android devices, Hugo Bara, Android's director of product management, said in a Google+ post.
Most recently, Apple made the announcement that it had topped 40 billion downloads, with nearly 20 billion of them in 2012, and two billion of them in December alone.
While the two companies are neck and neck in most of these numbers, there is one where Apple clearly beats Google: in how many people actually pay for apps.
A report from Statista in August showed that two thirds, or 66%, of Android users did not pay anything for the apps they downloaded over the course of a year, compared to only 30% of iOS users.
As evidenced by the still wide, though decreasing, revenue gap, while Android may be closing in on Apple's app downloads, only Apple is really making money off of them.
(Image source: http://www.androidguys.com)