Android losing out to iOS on app revenue

Android has taken the world by storm and has surpassed Apple's iOS in regards to the number of smartphone users. Apple however are still selling more applications and generating more revenue.

Distimo filed a report on the subject yesterday and it shows that the Apple App Store generates four times as much revenue as the Google Android Market. They said “2011 was the year where in-app purchases and the freemium business model became one of the most important monetization strategies for developers. Half of the revenue of the 200 top grossing apps in the Apple App Store for iPhone is now generated by freemium apps. This proportion is even higher in the Google Android Market where 65 percent of the revenue from the top grossing apps is generated by freemium apps.”

Freemium is a term used for applications which are free to download, but which charge for items to use within the application. Many games attract users by this methodology, offering a free means of entry, but hoping they will pay later for extra features or in game power up capabilities.

These ‘In-App' purchases have been a good means of income on the Apple Store since 2009, and they aren't yet available on Android – until March next year anyway. The Distimo report shows that 30 percent of iPhone downloads and 44 percent of iPad downloads originate from China.

Android's Market has the largest number of free applications, passing Apple in June this year. The games category is the biggest over all, generating the most downloads.

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