“Alphabet’s Google Android operating system has more devices in use today than Apple’s iOS, but Apple devices generate the lion’s share of mobile advertising revenue,” Patrick Seitz reports for Investor’s Business Daily.
“Apple iPhones and iPads accounted for 28.9% of ad impressions but 52.1% of ad revenue on mobile devices in Q3, Opera Mediaworks said. Android devices had 65.4% of traffic but generated 44.4% of advertising revenue last quarter,” Seitz reports. “Video advertising on Apple iPad tablets proved particularly lucrative. The iPad generated more revenue per impression than any other device, accounting for 8.3% of mobile ad impressions and 20.3% of revenue.”
Seitz reports, “Android leads in mobile devices in use worldwide by operating system with a 63.4% share, followed by iOS with 28.9% and others with 7.7%, Opera said.”
Read more in the full article here.
MacDailyNews Take: Bu, bu, but market share! (smirk)
Three years ago, we explained why this would happen:
Google made a crucial mistake: They gave away Android to “partners” who pushed and continue to push the product into the hands of the exact opposite type of user that Google needs for Android to truly thrive. Hence, Android is a backwater of second-rate, or worse, app versions that are only downloaded when free or ad-supported – but the Android user is notoriously cheap, so the ads don’t sell for much because they don’t work very well. You’d have guessed that Google would have understood this, but you’d have guessed wrong.
Google built a platform that depends heavily on advertising support, but sold it to the very type of customer who’s the least likely to patronize ads.
iOS users are the ones who buy apps, so developers focus on iOS users. iOS users buy products, so accessory makers focus on iOS users. iOS users have money and the proven will to spend it, so vehicle makers focus on iOS users. Etcetera. Android can have the “Hee Haw” demographic. Apple doesn’t want it or need it; it’s far more trouble than it’s worth. – MacDailyNews, November 26, 2012
Two big reasons why Google (Alphabet Inc.) might not survive the decade – November 3, 2015
Apple iPhone owns over 90% of smartphone profits, so why do others even bother fighting over Apple’s scraps? – October 8, 2015
Apple’s iPhone owns 92% of smartphone industry’s profits – July 13, 2015
Study: iPhone users are smarter and richer than those who settle for Android phones – January 22, 2015
Why Android users can’t have the nicest things – January 5, 2015
iPhone users earn significantly more than those who settle for Android phones – October 8, 2014
Yet more proof that Android is for poor people – June 27, 2014
More proof that Android is for poor people – May 13, 2014
Android users poorer, shorter, unhealthier, less educated, far less charitable than Apple iPhone users – November 13, 2013
IDC data shows two thirds of Android’s 81% smartphone share are cheap junk phones – November 13, 2013
CIRP: Apple iPhone users are younger, richer, and better educated than those who settle for Samsung knockoff phones – August 19, 2013
The MDN Take, while accurate, is sort of irrelevant…
Apple does not really care if iOS users watch videos using the Netflix, Hulu, YouTube, or some other third-party app, OR through its own iTunes Store. As long as they are using an Apple device to do that watching. Apple makes most of its profit by selling the hardware, not from running a value-added service.
And Google (Alphabet) makes most of its profit from ad revenue. Google (sorry but “Alphabet” is just too awkward) does not really care if that revenue is from Android or iOS devices, as long it is being generated. If Android did not exist, it is likely that there would be far fewer total smartphone users in the world, even if the number of iPhone users remained consistent. Android creates smartphone users at the low end, displacing the previous “feature phone” products.
Therefore, Google DOES benefit from having Android out there, even of the ad revenue per Android user is less than per iPhone user. Many current Android phone owners would not otherwise own iPhones (or “other” smartphones); there are more total smartphone users in the world today because of Android. And that ultimately benefits Apple too, because Android helps create Apple’s FUTURE loyal customers (as seen by the “switcher” statistic), faster than Apple can by itself.
“… there are more total smartphone users in the world today because of Android”
Wrong. The fundamental reason why there are more smartphones out there is because of iPhones. Before iPhone, smartphones were pretty ineffective at anything other than e-mail. The iPhone transformed the smartphone into a computer that fits into your pocket. Android clung onto Apple’s coat tails and provided a cheaper alternative to an iPhone which was much more useable than previous smartphones.
Look at smartphones before iPhone and then look at smartphones a couple of years later. All smartphones now work in the way that Apple pioneered, which is all the more amusing when you remember what people said about iPhone when it was released.
If iPhones hadn’t re-defined the way we use smartphones, most customers would not be interested in smartphones and would have remained happily using very cheap dumb phones. Android’s contribution has been to make the ‘free’ tier of contract phones become smartphones rather than dumb phones, but that would never have happened unless they had iPhones showing the way to do it properly.
Of course iPhone started it all. 🙂 Without iPhone, there would be no Android (as we know it). But AFTER that…
When Android copied the iPhone interface (before it was called “iOS”), it became like Mac versus Windows. The Mac started the “GUI” revolution and popularized personal computers (beyond a nerdy tool), but it was the Windows PC (starting with ’95) that grew the market beyond what Apple could achieve alone. And that mirrors Phone versus Android. iPhone redefined the existing smartphone and made it “cool” (more than an geeky gadget). But Android grew the market beyond what Apple could achieve alone. THAT is what I’m talking about… NOT about who gets credit for today’s smartphone.
How could you disagree with my statement you quoted (if you actually read what it says)? There are more Android phones in use today compared to iPhones. Do you dispute that…? OBVIOUSLY, “there are more total smartphone users in the world today because of Android.” Android copied iPhone and it’s become “good enough” for low-end customers to replace the so-called feature phones they bought previously. Therefore, Android creates more novice smartphone users than Apple can by itself.
Apple agrees. Note how Apple takes legal action against companies (like Samsung) that implement Android (in ways that copy iPhone’s “look and feel” too closely), but does NOT go after Google. This is because Apple knows having Android around is a good thing for Apple in the long run. The purpose of Android (from Apple’s perspective) is to create new smartphone users as quickly as possible. By copying iPhone’s user experience, Android trains people (who may not buy an iPhone as a first smartphone) to become Apple’s future iPhone customers. Tim Cook highlighted the “switcher” statistic as Apple’s ongoing benefit. So overall, Android does Apple more good than harm.
But getting back to the article’s topic, Google wants iOS to be around too, and going strong. Google derives far more ad revenue per iOS user compared to Android user. So conversely, iOS obviously does Google more good than harm.
Not sure I agree with your assessment.
Apple doesn’t go after Google because it can’t win any financial penalty. Because Google gives away Android, and they don’t make the hardware and benefit directly from the sale, it would be impossible to prove Google benefited and Apple did not.
Secondly, Apple is building an ecosystem that generates sales and profits as well as an advertising platform, so I think Apple is generating profit other than through sales of hardware, and the future could see a much larger growth of revenue and profit from services and advertising vs hardware, especially when hardware improvements begin to wane as the PC industry wrestles with today.
I agree with chazz15’s comments and was about to say something similar myself.
The only aspect that I would add is that Apple has grabbed pretty well the entire profitable part of the smartphone market and left the unprofitable parts to others. Even Samsung now appear to be struggling to make money from selling their smartphones, while many other manufactures are making losses.
The upshot is that while Android continues to be a popular ( because it is cheap ) solution for many customers, the manufacturers are not going to be making much money from supplying them, which is of course an unsustainable situation. Rather like the PC industry before it, one by one, the major players will have to bow out.
What’s in it for a manufacturer of Android phones? There is very little prospect of selling services or other extras, so the only benefit is profit on the initial sale. Without worthwhile profits, how will they keep making them, but more importantly, how can they finance future developments?
Apple has a business model that handsomely rewards innovation. iPhones are deploying advanced technology that other manufacturers cannot obtain. Apple manufactures a very small matrix of models and makes them in vast numbers, which means that it can do so very efficiently. Apple has opened up clear blue water between iPhones and others and it’s hard to see how the others could now close that gap.
Apple now has influence and can change industries. We saw how Apple pulled the rug from under Flash, even though people said that Flash would be around forever. Apple is now progressively pulling the rug from under Google’s Android by using commercial factors rather than the courts.