

Why Android devs are losing money, and it’s not due to piracy - GR8K
http://royal.pingdom.com/2010/08/16/why-android-developers-are-losing-money/

======
jsz0
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.

~~~
melling
Interesting. I know that some games are direct ports of their iPhone versions.
It doesn't make sense why they would be worth the money on the iPhone but not
on Android.

~~~
houseabsolute
It makes a little sense. Demographics is one aspect -- people who buy Android
tend to be cheap, and don't like paying for quality. Or else they would own
iPhones. :) The required flamebait out of the way, let me get to my real
points. (Well, this was a real point too, but said as offensively as possible,
which the remaining are not.)

Another issue is market construction. Think about walking by a luxury goods
store. Imagine you're on Michigan Avenue with the sky scrapers and the
beautiful people, the August sun beating down and a light breeze to keep you
cool. All those factors probably put you in a pretty damn good mood, the mood
to spend.

Now imagine you're instead in downtown Detroit, browsing the same merchandise
through poorly lit, grid-crossed holes in squat, cinderblock buildings. Maybe
the goods inside are worth the same amount, but the average person in the same
situation is not going to pay as much.

That's what the Android store is like. Two screenshots compressed at just
insane levels like Google has run out of hard drives, and four hundred
characters for a description. That puts anyone in the mood to spend, right?

A final factor is the miserable battery life of the average Android handset,
which makes them less suited to be a gaming device if you want them to work as
a phone later.

Also, how many games have really been ported directly to Android from iPhone?
I mean good ones, now, ones people have actually bought on the iPhone. There's
a halo effect involved too. If you go for years without seeing a decent game
for a device, you end up being trained to think of it as a non-gaming device.
On the other hand, I only have to browse the internet for a couple of minutes
to find a half dozen iPhone games I wouldn't mind paying a buck to try out.

~~~
tjogin
Good points. I'd add that in the AppStore, consumers feel safe. You don't have
to worry about viruses, malware or even that apps don't do what they say they
do. Apple has removed numerous reasons for _hesitation_ from the buying
experience.

------
gamble
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 _want_ 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?

Edit: Even worse, Google apparently doesn't get _any_ revenue from paid app
sales. Their 30% cut goes to the carrier. (Thanks gregholland!)

~~~
nonane
The paid App Store or Android market will never be a revenue stream for Apple
or Google. In fact it is probably designed to be break-even at best. They need
interesting apps to push their respective platforms further - that's where the
gold mine is for both companies (apple gets to sell more hardware and goog
gets more searches)

~~~
gamble
Yep, the difference between them is that Apple had the luxury of waiting a
year before tackling the app store (and experience with iTunes to draw from)
whereas Google needed an app store on Day 1, albeit a store they could
neglect.

~~~
berntb
Point, but they also got something existing to copy -- and be compared
against.

~~~
forgottenpaswrd
Point, it is way easier(and far less work) to copy than to design something
from scratch.

~~~
berntb
That was half of my point; the other half is that the copy _will_ be compared
to the original.

When you steal a design and reimplement, only Microsoft (ten years ago, not
now) got away with doing it worse...

------
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.

I have almost given up on the Android market, Looking forward to MeeGo and
Win7mo.

~~~
orangecat
_But for paid apps, the 30% that gets taken away from your sales goes to the
carrier instead_

Do you have a source for that? As far as I know you pay for apps using Google
Checkout and the carrier never enters into it.

~~~
gregholland
<http://news.cnet.com/8301-1035_3-10072682-94.html>

quote

"One difference the mobile phone industry might well find appealing: Apple
keeps the remaining revenue, but Google gives it to wireless service carriers,
minus billing settlement fees."

~~~
wvenable
With Google not getting revenue from the Android store, they have no incentive
to improve it in any way. They won't be nearly as concerned about their
developers making money, either. It sounds like a terrible plan all around.

~~~
nanairo
They do have an incentive... but an incentive to make developers use ads-
subsiadised apps. Maybe that was their main strategy all along, and they told
the carriers they could keep any money made on the store to get some traction
(and to avoid the carriers creating their own stores).

------
Rabidgremlin
Although you CAN buy apps on the New Zealand market place, as a developer in
New Zealand, you CANNOT sell any apps!

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.

I had an email conversion with Tim Bray about this...

He said: "I hear you. We're working on lots more countries. It's an amazing
amount of work to do each one. -Tim"

But did not indicate any timeline :(

~~~
nl
Here's the list of countries:
[http://market.android.com/support/bin/answer.py?hl=en&an...](http://market.android.com/support/bin/answer.py?hl=en&answer=150324)

I'm _amazed_ that Google hasn't fixed this. Apple didn't have the problem at
all, and I don't understand why it is taking Google so long.

~~~
djcapelis
> Apple didn't have the problem at all

You sure about that? Just because Apple took care of it doesn't mean it didn't
take a lot of work.

~~~
mechanical_fish
The secret is that Apple did all the groundwork years in advance, as part of
rolling out the Apple Stores, the iTunes Music Store, et cetera.

~~~
nonane
Doesn't Google already have a way to remit money to adsense partners across
the world?

~~~
mechanical_fish
Presumably. But AdSense is a rather different business.

Consider: I don't think advertising is subject to sales tax. Here's New York
State on the subject:

[http://nystax.custhelp.com/cgi-
bin/nystax.cfg/php/enduser/st...](http://nystax.custhelp.com/cgi-
bin/nystax.cfg/php/enduser/std_adp.php?p_faqid=1215&p_created=1104328228)

When you go into a product business you may have a different set of legal
issues to consider. It's also B2C rather than B2B, which changes the sort of
customer service you need and (I'm guessing) dramatically increases your
vulnerability to things like chargebacks and stolen credit cards.

------
zmmmmm
It is just as big a problem or perhaps even bigger that hardly any countries
are allowed to _sell_ 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.

The result is the quality of apps is poor and profits are lower across the
board.

~~~
megablast
>So what do they do? they make free apps that compete with the paid apps.

No, they stay with Apple, where they can actually make money.

------
binarycheese
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.

I could go on and on...

Even the Developer portal on the Android Market is just horrible. I'm not sure
what they were trying to accomplish.

\- 2 screen shots???

\- extremely limited description?

\- No clear text box for "Update Reason"?

\- You can't respond to user ridiculous comments?

\- Sometimes my paid apps get cancelled after two days of purchase

P/S: I have more than 1/2 million combined downloads

~~~
enjo
Ok this is just wrong on so many levels.

It's trivial to create interface elements on the fly, even when using XML
resources. You're not under any obligation to even define things using XML if
you don't want to (and some more dynamic apps don't).

There are some issues with the way things are named (a spinner is not what you
think it is), it's really a pretty small issue. I find the API's to be fairly
well documented and fairly straightforward. A large amount of the standard
Java library is available as well.

The app-store is a complete and utter mess and I think Google knows it. I
fully expect them to address it in their next release (I hope).

~~~
binarycheese
You obviously don't develop large/similar applications do you?

We have custom controls (text boxes, listviews, dynamic formviews) that
inherit from Android controls, that are reused over 15+ applications. It was
hell building them scratch because the main app was a Java library (not an
android app so the XML resources are useless).

I don't think you even understand what I'm saying. For example: Can you
explain to me why the __CheckedTextView __control is available in XML but the
class itself is __abstract __?

~~~
cmatthias
I'm not even an experienced Android developer, but I just looked up
CheckedTextView:

[http://developer.android.com/reference/android/widget/Checke...](http://developer.android.com/reference/android/widget/CheckedTextView.html)

I see no indications that it's abstract, and I found a bunch of other abstract
classes that clearly say "abstract" above the class name at the top of the
page. Am I totally off base here?

------
danielsoneg
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 & Culture. There is a big, big
difference between how Google & 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.

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.

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.

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.

~~~
megablast
You normally have to put in your password as well, unless you have chosen to
skip that step in itunes, which seems a pretty silly thing to do.

~~~
omaranto
I think iTunes is the only place where I can skip a password and choose not
too, out of fear of buying things by accident. I could go or a confirmation
dialog instead, though.

------
CitizenKane
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.

[0] [http://www.eurogamer.net/articles/valve-we-dont-worry-
about-...](http://www.eurogamer.net/articles/valve-we-dont-worry-about-piracy)

------
watmough
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.

If these countries are covered for buying Android apps, and per the article
they are, then Android should be doing just fine.

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.

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.

edited to give my reasoning on why I respectfully disagree with the article.
;)

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

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

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

------
watmough
Here's some information about the Android installed base by country.

[http://www.techinfospotlight.com/2010/05/phone-os-market-
sti...](http://www.techinfospotlight.com/2010/05/phone-os-market-still-twice-
as-big-as-android-in-us/)

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!

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 &
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."

------
lazugod
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?

~~~
GvS
<http://slideme.org/> \- app for it comes with CyanogenMod

~~~
ashbrahma
<http://store.handmark.com/> \- Accepts a wide variety of payment forms and
has a decent selection of titles for Android.

------
jbellis
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.

(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.)

~~~
TeHCrAzY
Thats a limitation with your credit cards. Mine can bill in any currency
required (obviously, followed by a currency conversion fee, and the conversion
itself being completed at rates seemingly VERY favorable to the bank/cc
company).

~~~
ars
Actually the exchange rates are quite good.

But many (not all!) banks will charge a fee (1- 3%) on top of that.

------
hga
" _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._ "

Yikes!

