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

Why Android devs are losing money, and it’s not due to piracy(royal.pingdom.com)

85 points by GR8K 15 years ago | 73 comments

jsz0 15 years ago |

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.

eldenbishop 15 years ago | |

My wife has the verizon droid and she has not bought a single app while I have at least 30$ worth of apps on my iPhone. It is not just the reasons you have listed. Go into the reviews and you will find that every app in the store does not work on at least one model of phone. Additionally, when my wife had a problem with her phone the Verizon rep told her to uninstall all her applications and put them on one at a time, with a day or two between installs to try and find which one created the problems she was facing. I tried to help out by going online and found forums discussing which versions of which apps on this or that handset killed performance, battery life, stability etc. In short my wife has basically refused to install anything other than the stock applications and a few google apps. Google has, in my opinion, failed to create an ecosystem where people feel safe purchasing software.

paul9290 15 years ago | | |

Mine just tried to update to Froyo and it bricked her Droid. Verizon is sending a replacement in the mail and she will be receiving it within five days. Though they offered her to send it overnight for $20, yet it's not her fault.

Too bad there isn't a Motorola store you can take and get it fixed the same day like Apple has done for me 3 times with my iPhone.

Prior to her experience and now comparing it to my Apple experiences I thought Android was a pretty good platform. Yet, with it's lackluster customer service, Google selling it's soul to Verizon & these continued posts of it's lackluster app store - I'm not so sure anymore.

nuclear_eclipse 15 years ago | |

Android apps I've bought:

- AndChat (great multi-server IRC client with support for SSL, handles connectivity changes far better than any other client for Android)

- RoboDefense (which btw doesn't have a screenshot because it's targetted at Android 1.5)

- Flight Director

- Hard Copy (excellent Instapaper app by an HN fellow)

- Locale (amazing contextual settings application, well worth the high price)

- Smart Keyboard Pro (supports Dvorak and a million other options)

- Titanium Backup

- TivoRemote (allows me to control my Tivo while upstairs watching from my second TV)

- Twidroid (was my main twitter client until the official client was available in Froyo)

Apps I would have gladly paid for if they weren't already free:

- ConnectBot (SSH client)

- K-9 Mail (best IMAP client I've found for Android that will actually work with my own mail server)

mcantor 15 years ago | | |

ConnectBot is better than many desktop SSH clients I've used.

eli 15 years ago | |

Robo Defense (just like pretty much all popular paid games) also has a free version that includes the first few levels. It's a pretty fun game; I bought it.

And did you know you can easily return paid games or apps and get your money back within 24 hours?

dpcan 15 years ago | |

Some people are finding apps they want to buy. I've sold my games to thousands, and it just keeps getting better.

Sure, the quality of a lot of apps stinks. There seems to be a lot of trademark infringement going on, and I don't really understand the success of the emulators, but all that aside, many of us creating legitimate apps are making money - so people ARE buying apps.

Going back to the article, the main problem for me is NOT that I can't sell to some countries yet, it's that I want some simple and basic improvements to the Market. Market updates only seem to come along once in a blue moon. For example, I was selling for months before I was able to view comments in the Dev Console.

#1 update needed in my opinion: Let me write more than 325 characters to describe the game I've worked months creating.

For the most part, I'm grateful the Market exists and is so easy to use because it's helping to support my family, and I run a game company now... so, dream come true.

melling 15 years ago | |

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.

megablast 15 years ago | | |

Apple makes it incredibly easy to buy. Once you have your credit card details on file, you can buy. Or you can get an itunes card from a million different places. Also, people have likely already bought from Apple, a song or tv show.

Google really suck in this department, although I am mainly pissed because they still will not let Aussies SELL apps in the store. Maybe Google do not care about this at all, since this has been an issue regularly bought up here and in other places other the last 3 or 4 months.

houseabsolute 15 years ago | | |

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.

moultano 15 years ago | |

What sort of apps would you consider buying? What are you looking to do with your phone that you can't do with a free app? I've bought apps but mostly just the "donation" versions of free apps that I use a lot.

pkulak 15 years ago | | |

How about a card game that doesn't blow? I've bought the Apple poker game, hearts, and some others. I paid 3 bucks for a hearts game on Android and it was terrible. It looked like some 1996 Windows shareware game. Tiger Woods golf is fun, and so is Angry Birds. Or how about a navigation app for when you're out of service? The Android app store is just about useless.

gamble 15 years ago |

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 15 years ago | |

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 15 years ago | | |

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.

jberryman 15 years ago | | |

I guess the app store has accounted for about 1% of Apple's profits since 2008:

http://www.cultofmac.com/analyst-app-store-just-1-percent-of...

Seems like a pretty huge return on investment, although a small percentqge of their overall profits. Hilariously most of Apple's percentage of an app sale goes to CC companies

gregholland 15 years ago |

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 15 years ago | |

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 15 years ago | | |

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."

Rabidgremlin 15 years ago |

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 :(

zmmmmm 15 years ago |

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 15 years ago | |

>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 15 years ago |

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 15 years ago | |

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 15 years ago | | |

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?

danielsoneg 15 years ago |

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 15 years ago | |

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 15 years ago | | |

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.

danielsoneg 15 years ago | | |

Yeah, but only once per 10min or so, and if you've just done an update or any of a range of other activities, that password is still valid. Once the password is in, no confirmation.

And yeah, agreed, skipping the password box is just dangerous - WAY too easy to spend money there.

CitizenKane 15 years ago |

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-...

watmough 15 years ago |

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 15 years ago |

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

TeHCrAzY 15 years ago |

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

Tichy 15 years ago |

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

watmough 15 years ago |

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

http://www.techinfospotlight.com/2010/05/phone-os-market-sti...

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 15 years ago |

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 15 years ago | |

http://slideme.org/ - app for it comes with CyanogenMod

ashbrahma 15 years ago | | |

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

jbellis 15 years ago |

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 15 years ago | |

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 15 years ago | | |

Actually the exchange rates are quite good.

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

hga 15 years ago |

"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!