Google's Android Vs. Apple Development

| About: Alphabet Inc. (GOOG)

In an article on the next web, a study by Distmo showed that while Google (NASDAQ:GOOG) Play was increasing in size, the Apple (NASDAQ:AAPL) store was making more money.

At first glance this might illustrate a developer preference for AAPL, but I can say very confidently, this is not the case. The amount made by developers doing third party development far exceeds the amount made by the Apple store. I am currently in the process of developing a mobile app for an e-commerce company and I am utilizing Phone Gap. Phone Gap, for those not aware, is a development platform that allows you to use web technologies to create applications for both Android and iOS.

For Developers, the Money is not in Sales
Most development firms will not get a blockbuster like an Angry Birds that produces so much profit and renown that it can sustain a company. Most development firms will sustain themselves through third party development contracts.

While I won't list it, the development fees I make for my development will far exceed the revenue that an average independent developer will make from trying to build and sell an app independently, unless they get incredibly lucky.

It is true that if you're an independent developer you might make more with Apple; you will be able to buy yourself coffee for a month. The reality is these large revenue numbers produced by the Apple store are divided a lot. Consider for a moment that 13% of Blackberry developers make over $100,000 per year. The reason for this is simple, there is less competition.

So while it might appear that developers are making a lot of money with Apple, what you don't see is how much is getting paid to developers to develop for Android. The reality is the capitalization for Android development on a project to project basis far exceeds the revenue generated by the Apple store in a given year and this is why the Google Play market is continuing to grow.

Moving Past App Sales
Companies are finally realizing that selling mobile apps or subscriptions is a bad idea. Further some companies are opting to forgo native for HTML5 or HTML5 Web Apps which aren't restricted to Apple. The Financial Times, in particular, watched its subscriber base climb to outnumber print, with 2.7 Million users accessing its content via the web apps as of July.

Mobile applications, companies are learning, are not for making money through application sales but by supporting and amplifying core business elements. If you're a developer, you can either get a couple of cups of coffee a month from Apple, or make a living realizing the new reality of mobile development.

Implications For Google and Apple
While it is all fine and dandy that developers might be making more developing for Google, how does this actually help Google? It helps to support its Android platform and potentially gives the company an edge in the future. If a mobile application is not technically intensive, the reason people prefer a mobile app is because the mobile internet is not very good. Very few companies actually have good mobile versions of their sites and while full sites work on smartphones and tablets, there is a lot to be desired.

However, while it may be slow, as the mobile internet continues to improve and the tools for creating mobile internet content get better, people will start going to Google search more to find mobile websites before they do a search in an app store. This would be far more beneficial to Google because they can actually make money from this behavior.

The immediate future is better for Apple which has a streamlined process for purchasing apps and a higher revenue for its store. However, as HTML5 proliferates and the mobile internet gets better, people will slowly but surely start visiting Google search before going to an app store and this will translate into more revenue for Google over Apple.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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