Will the Rise of Android Change How Apps Are Monetized?

The iPhone has been slowly losing its dominance in the minds of marketers as Google’s Android operating system gained share over the past year or so. The complication of creating apps for multiple operation systems has been an issue for marketers for some time, but as Android becomes a major player in the app world marketers may also have to start thinking about the way those apps are monetized and how that fits in with the norms of different user groups.

There is evidence across several studies that Android users are somewhat less willing to pay for apps than their iPhone-loving counterparts. AdMob found in February that while 50% of iPhone owners worldwide purchased at least one paid app each month, just 21% of Android users did the same. Credit Suisse reported that less than 70% of Android users had paid for apps in the month prior to being surveyed, compared with nearly 80% of iPhone owners.

According to a May 2010 report from Distimo, an analytics tool for mobile developers, the Android Market is the only store with a majority of free apps.

That could mean Android users are simply responding to supply—a large base of free apps means less need to purchase them. Credit Suisse also found that Android users spent slightly more on average than iPhone owners did on mobile applications, suggesting that they are willing to open their wallets as well.

But the rise of an operating system whose owners are used to relying on free apps could mean a user base that is more open than average to receiving the advertising support necessary to support those apps. In-app advertising and app sponsorships tend to be especially effective forms of mobile marketing, and are also found less annoying or intrusive by mobile users. An expanding base of Android users may mean not only a larger audience of smartphone owners, but also a growing share of that audience receptive to marketing messages that support their app habit.