Virtua Team Talk

Another new year is here and the big smartphone players are already jostling for position in the ongoing battle for supremacy while the app developers continue to come up with innovative new ideas for us to play with.

2011 was a very good year for Android, Google’s operating system, and it’s market share has been steadily growing. Good news for Google in a way but it still has a long way to go to catch up with Apple. Apple still leads Android in the apps arena with Apple stores turning out a staggering 18 billion downloads to date. Android still hover around the 10 billion apps mark but they are undoubtedly catching up with 1 billion downloads per month and growing. The war continues!

Is Apple worried? Depends on what angle you choose to look from. In terms of revenues Apple beat Android hands down. Android developers only earn 7% of what Apple developers can demand. Although Google can boast a huge market share in terms of its growing apps portfolio Apple are still leading the field in terms of its earnings. We are talking big money here. Apple’s App store has earned about 5 billion dollars in gross revenue against Android’s 330 million dollars. One of the major reasons for this difference is that Android continues to offer a lot of ‘free’ apps, something Apple is loathe to do. Free apps certainly attract a lot of new business but when it comes to the bottom line Apple like to earn from every single app.

But it’s not all about dollars. There are also a lot of ‘cultural’ factors involved too. Apple’s philosophy and brand identity are so strong that some commentators refer to it as the Apple ‘ecosystem’ – and once it has captured enthusiasts it tends to keep them. This is not the case with Android. The Android brand is not as strong and buyers tend to come and go with less brand loyalty.

The buying experience is different too. Apple’s iconic stores are well organised and although they are clearly geared to selling it is done in a friendly, open and relaxed way. The whole Apple store ‘sales experience’ has clearly been well thought out. Android, in contrast, tends to focus too heavily on the ‘buy your FREE apps here’ approach – which doesn’t work for everyone.

If you are a betting man or woman then don’t jump to any conclusions just yet though. Android is certainly growing rapidly and winning the ‘market share’ race at the moment but Apple is still leading the revenues stakes. The battle though, is far from won. No doubt 2012 will see a number of strategic twists and turns that few are able to predict and it is more than likely that both Google and Apple have a few surprises up their sleeves to keep the battle raging.