Guess who makes money from Android?

“All right, we all know the score: Google’s Android mobile platform is dominant worldwide,” Gene Steinberg writes for The Tech Night Owl. “Apple is in second place, but the critics say this is just a replay of the old Mac versus Windows wars. As more and more commodity handsets powered by Android are sold, Apple will be consigned to their traditional niche status. End of story.”

“In the real world, however, the situation is far more nuanced. As of the December quarter of 2012, Apple earned more than two thirds of the smartphone industry profits. This is the same quarterly result that caused Wall Street and many tech and financial pundits to go sour on Apple, so go figure,” Steinberg writes. “At the same time, even though the number of Android apps being downloaded these days has begun to surpass iOS, more free apps are included in those numbers. Apple still gets the lion’s share of the profits.”

“The marketing plan for Android is very, very different when compared to Apple. Google gives the OS away to handset makers. They are free to alter it to their needs, which results in a very different experience from company to company, or even from handset to handset. It’s sometimes hard to know that Android is even around, and the Amazon Kindle tablets are prime examples. Amazon has buried Android real deep, so its presence is almost impossible to detect by regular people. In turn, Google earns revenue from targeted ads, the more the better, plus a share of app sales. Thus, they earn nothing from Amazon’s Android tablets,” Steinberg writes. “But would it surprise you to know that Microsoft also earns money from Android licensees?”

Read more in the full article here.


  1. The problem with the iOS vs Android will be Win vs Mac all over again concept is the way they started. When the Mac came out MS DOS already had a strong market. To make things worse Apple killed the ][, the product that competed with PCs. When Win came out MS had the business market. When the Internet came in the 90’s people chose what they had at work. iOS quickly took the smartphone market. BB was about the only player, and regular people were not using them at work. Android hit the market strong, and has done well; however iOS has a large presence that Mac never had. MS has a stranglehold on OEMs that Google does not. The game did not start the same, is not played the same. The outcome will be different.

  2. If we, as Apple fans, stop to think. We buy Apple products. Apple’s profits come out of our wallets. Apple sells less computers, for greater profit, meaning that we – the Apple purchasers, are being screwed for more money, simply because Apple knows we will buy.

    1. Yes and no. I agree with NM to some degree. Apple rigidly maintains profit margins. OK, good plan. But for what exactly? They spend money on RD, on support, Genius Bars, advertising, iCloud all sorts of other things. But at the end of the quarter they are always massively profitable. And now sitting on the biggest cash hoard the world has ever seen.
      Seems they could do something about price point and the lingering impression that Apple is overpriced.
      Sorry, but I would rather see Apple drop prices of strategic products rather than hand out cash to shareholders.

    2. I purchase Apple products for a reason and not the upfront price. Ease of use, cost to upgrade OS less per increment, family packs upgrades, reduction of software problems, reduction in hardware problems, security, and the extended time they last. Lower cost up front will not always equal the less cost over the life.

      I have saved money by buying a Mac or iPhone over the cheaper PC or Andriod- in this area you do get what you pay for.

    3. If we, as BMW fans, stop to think. We buy BMW products. BMW’s profits come out of our wallets. BMW sells less cars, for greater profit, meaning that we – the BMW purchasers, are being screwed for more money, simply because BMW knows we will buy.

  3. Let Apple be a premium brand. Why does everyone continue to keep wanting Apple to be something it doesn’t need to be. You don’t look at BMW and say they would be better off if they priced themselves like KIA. If they did that they would be considered no better than KIA. Price points play a big part in perceived value. If you can’t afford an Apple product, then you can’t afford membership to the owner’s club. Just like if I can’t afford a BMW, i don’t get to be included in that group of owners. The notion that if they lower the price so that those who can’t afford them now could be included in the club is silly and defeats the whole idea of a premium brand.

  4. Safari is the dominant e-commerce platform on all of my clients’ e-commerce sites. Android accounts for less than 1% of sales. Users of IE have suddenly shifted to chrome in mega numbers. Chrome/Android is going to kill Microsoft. The TV ads will change peoples’ workflow away from PC. However, these people don’t buy very much.

    Apple is trending hard in all of my Analytics stats across hundreds of sites and the iPhone is crushing android, so it’s really hard not to see that everyone is treading water versus Apple. $10 to Microsoft is peanuts compared to the MS Windows and MS Office profits that are going out the window with chrome/android workflow.

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