Android app revenues to double this year to $6.8B for smartphones alone

Android app revenues will hit $6.8 billion this year for smartphones alone, ABI Research said today. That’s almost double the total from last year.

It’s still only about 60 percent of Android rival iOS.

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“Apple’s iOS still leads all the other mobile operating systems’ revenues by a significant margin; however, the greater number of Android smartphones in use is clawing back Apple’s lead in this market,” senior analyst Josh Flood said in a statement. “This year, Android smartphones will ship by a factor of more than three-to-one to iPhones.”

The global app economy for 2013 will reach $25 billion this year, and about 65 percent of that is on smartphones, with the remainder on tablets. Apple has a combined 65 percent share of app revenue across both smartphones and tablets.

But one of Android’s advantages — besides its clear sales lead — is Google.

Google is the online advertising king, and it’s taking that lead to mobile. With the fast-growing Facebook, Google owns 70 percent of global mobile ad revenues. Since 90 percent of apps are now free and monetize mostly through advertising, that gives Google a major advantage.

“Android’s digital advertising, which is primarily based on Google’s powerful analytics search engine and vast experience, gives the company a big edge over Apple,” ABI said. “Google has been incredibly successful at mastering targeted online advertising.”

In addition, the openness of Android, showcased in Google’s willingness to allow carrier billing for apps, could be a big deal. Not only does this broaden the revenue-sharing field and incentivize carriers to opt for Android preferentially, carrier payments have significantly higher completion rates than credit or debit cards.

That’s especially important in emerging markets such as Latin America and Asia-Pacific, ABI said.

Android app revenue from smartphones is projected to hit 66 percent of iOS smartphone revenue in the next 12 months. That’s fairly slow revenue growth, given Android unit sales. And it’s possible that Apple’s new cheaper iPhone 5C could have something to say about those amazing Android sales numbers in both emerging markets and at home.

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