Google pays Apple more than twice what they earn from Android

Horace Dediu, Calculating Google’s contribution to iPhone profitability:

The interesting factors at work here are that this contribution by Google to Apple is higher than the contribution by Android to Google.


$1.4 billion from Google to Apple vs. $600 million from Android to Google.

I’ve been wondering lately, with all the woes besetting Android, just how long Google will keep it around…

70 percent of all smartphones sold by AT&T and Verizon last quarter were iPhones

Via Daring Fireball.

So it seems in my previous analysis of the Android userbase, I left out “people who couldn’t wait for the iPhone to come to their carrier of choice”. It seems Android’s meteoric rise was due at least in part to limited availability of the iPhone. Going forward the smartphone landscape will get very interesting.

I’d be very interested to look at sales numbers of the iPhone in Australia, where it has been available from nearly all carriers from the beginning. Alas, I haven’t a clue where to find this sort of thing.

We Are The 0.6%


Hard to pick the most ridiculous element of these updated numbers.

Is it that just 0.6% of Android users have Ice Cream Sandwich (4.0) two months after it launched?

Is it that of the remaining 99.4%, only 55% are upgraded to Gingerbread (2.3), which came out over a year ago?

Is it that over 30% are stuck on Froyo (2.2) which is 20 months old?

Is it that 8.5% (something like 10 million devices) are stuck on Eclair (2.1), which came out two years ago?

Is it that only 3.3% are using Honeycomb (3.0), which means that all those highly-touted tablets last year are clearly huge flops?

I can’t decide. You choose.

Android users, this is why you can’t have nice things.

The Android userbase

There’s been a number of good articles in the last few weeks illustrating my reservations about developing software for the Android market.

As part of Andrew Kim’s visualisation I linked to previously, he makes the following comment that I tend to agree with:

I’ve always categorized Android users into two key segments; nerds and budget buyers.

I’m going to assume when he says “nerds” he means in the same sense I do: “tech enthusiasts”, not meant in any sort of derogatory sense. The tech enthusiast is attracted to Android for the same reason they are attracted to Windows or Linux: they prefer getting their hands dirty with technology and tinkering, and don’t mind the relatively poor user experience that comes with the ability to do that. A tech enthusiast doesn’t feel comfortable with a controlled system like those Apple makes any more than a car enthusiast feels comfortable with modern, locked-down cars. I know a few people that fall into this category, and Android certainly seems like the platform for them. It’s the relative flexibility of the software and variety of the hardware that attracts them.

However, Kim goes on to say that it’s the budget buyers, not the nerds, accounting for the huge shipping numbers. I think this is clearest when you look at Horace Dediu’s graph of overall phone marketshare. Android’s marketshare gains are not coming wholly at the expense of other smartphone vendors, they’re mostly coming at the expense of “feature” (dumb) phones. The obvious reasoning is that previously, dumb phones were subsidised to being free with phone plans, whereas now it’s Android phones with the heaviest subsidies that come free. The budget buyer likes “free” stuff, forgetting that most of the cost goes into the plan.

This also goes into explaining the difference between Android market share on phones and Android market share on tablets. John Gruber’s analysis of the recent NPD Group report shows that the iPad’s dominance is overwhelming. At the same time, the distant second-place TouchPad’s “strong” sales can almost completely be explained by HP’s fire sale to get rid of them all after abysmal sales. So in the tablet market, where there is no real “free” option, the iPad reigns supreme. Again, Android is the domain of nerds and budget buyers, though there isn’t a lot to attract the budget buyer who accounts for most of the phone sales.

With most Android owners being budget buyers, it’s not surprising that it is a lot harder to make money from the Google Marketplace than it is from the App Store. Neil Hughes at AppleInsider writes that the Google Marketplace earns just 7% of the App Store’s profits. As Marco Arment comments, this abysmal number considering the difference in market share means that Android is just not a good environment for anyone wanting to sell software. The higher rates of piracy and fragmentation issues don’t help either.

As an app seller myself, I’ve been asked more than once to make an Android version of my modestly successful app. But looking at the numbers, there is just no possible way it could be worth my while. As long as the Android userbase is mostly made up of people who don’t want to spend money, it will never be attractive to developers who don’t want to pollute their work with ads.

Four months with Android: reflections, grievances and some tenuous metaphors bundled up into a weighty tome


That’s not to say I didn’t learn a lot. I have a solid grasp of what makes Android Android, the ins-and-outs of the OS, and, yes, there are even a few really great features I will miss as I transition back to iOS.

But at the end of the day I’m left with mostly a bad taste in my mouth. What follows is a summation of four months exclusively using Android.

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Ryan Heise completes his "Dinner with Android" experiment.

I considered doing a similar experiment when my contract with my iPhone 3GS finished. I ended up not doing it since my iPhone still worked great, so the only reason would be to play with something I knew I would be giving away once the next iPhone came along. I’m glad I didn’t, as I feel from following Ryan’s blog that I would have reached the exact same conclusion.

The key thing keeping me away from Android is the user experience, though it certainly isn’t the only thing. Ryan highlights what I think is the crucial element to the iOS experience:

These are digital devices that are trying to be analogous to the real world. […] using your fingers to manipulate what are essentially buttons is something we are accustomed to. The problem is that it needs to feel like you’re manipulating real objects when you’re actually pantomiming across a piece of glass.

The iPhone got this right. Presses, swipes, scrolls and zooms work and feel so good because they happen close to realtime and to a 1:1 action.

With Android, at least on my Nexus S, nothing feels this good. Everything still feels like an input that is creating a reaction. You do something with your fingers, the OS interrupts it, and stuff happens on the screen. The performance isn’t there, and to me it feels bad.

Before the iPhone, touchscreen interfaces were bad. They lacked the immediacy that made things feel like you were directly manipulating them. I remember discussing the concept of touchscreens with people when the iPhone first arrived, and a surprising number of them disliked the concept of a touchscreen based solely on their previous experiences with bad ones. Yet once they actually tried the iPhone interface, it was clear they were rethinking their opinions: this was exactly like a touchscreen should be.

Apple focused on this immediacy aspect intently, yet it seems to be something that Android has yet to realise. On iOS, it feels like you interact directly with your content. On Android, it seems like there’s a layer in between.

Another factor I feel impacts the Android user experience is the huge differences in screen sizes and resolutions. Ryan doesn’t touch on this, but I really think the limited variety of iOS screens (that is, 2 sizes) makes for far better usability design. When you interact directly with app content, designers need to know exactly how that content is sized in proportion to your finger. With iOS, they do: users are either using an iPad-sized screen or an iPhone-sized screen. With Android, this seems to be a really hard thing to do. Designers can’t make pixel-perfect apps if they are always being resized.

I know some people go with Android precisely because they offer different screen sizes than iPhones, and that’s a valid choice. But app usability is bound to suffer in an environment of multiple screen sizes and resolutions, even more so with touch devices than we’ve seen in desktop computers. While bigger screens are enough of a draw for some, the compromises in user experience are unacceptable for me.

So that is the crucial reason I choose iOS over Android. As a fanatic for good usability, Android just isn’t for me. I can see the attraction it holds for a some people, in the same way I can see the attraction Linux holds for some people. But to me, user experience is the single most important feature of a product, and I’m not willing to compromise that for any secondary feature.

Coyote Tracks: There can be more than one

Great piece by Watts Martin at Coyote Tracks, about “winning” the smartphone market. My favourite part, summing up what many critics seem to be blind to:

The iPhone didn’t do anything that you couldn’t do with smartphones before, just like the Mac didn’t really do anything that you couldn’t do with computers before it came out. But neither one worked quite like anything that came before it.