In the smartphone and tablet world, there are two major operative systems: Apple’s iOS and Google’s Android. The front end may have a lot of similarities, but the back ends can’t be compared.
Mobile applications, also known simply as “apps”, has become a major source of income for both Apple and Google – but what about illegal copies?
Apple’s iOS is closed source and very restricted, and you can barely make a change on your iPhone or iPad without going through iTunes. This reminds you how little you can actually do with your iOS device without Apple’s permission.
To break out of this alleged prison, a huge number of developers have made alternative software that bypasses the need for Apple’s blessings. Amongst other things, this allows the user to get free apps and make a lot of cool, exclusive changes.
This has been dubbed “jailbreak”, underlining the fact that iOS for many feels like a prison.
This strategy has been met with a lot of criticism, making open source fanatics take the obvious step towards Android. With Android’s open source operative system, virtually everything is possible, including getting easy access to bootlegged apps.
Like iOS, Android is being criticized with some opponents going as far as calling it a “bad business strategy” for Google.
The main income for Apple and Google is selling developers’ apps. Both Apple’s App Store and Google Play take a percentual fee of the revenue from the app sales. Hugely popular games like Angry Birds and Wordfeud makes this an incredibly lucrative market.
To understand the claims of this being a bad business strategy for Google, we need to consider the much-debated torrent sites. There’s a huge search volume on Android apps and the number of new pirates specializing in sharing exactly those have soared.
These pirated apps – called “apks” – can freely be added to an SD Card or downloaded directly to an Android device without having to jailbreak the phone or make other complicated changes. In other words, there’s no need for any technical knowledge whatsoever, so getting and using paid apps for free has never been easier.
This is where the open source strategy apparently fails, because as the number of pirated apps goes up, Google’s revenue goes down.
Google has chosen not to speak publicly about this issue so far, but it’s obviously a huge deal for them. With a publicly accessible operative system it’s more or less impossible to stop user from using “apks”. Not even Apple with their closed iOS has been able to prevent it, and on top of that, using illegally downloaded Android apps requires no special skills whatsoever.
Google’s clever solution
However, Google and the developers have come up with an effective way to deal with this: Give away the app itself and earn money on in-app purchases.
In-app purchases is a way to make residual income from an app by allowing users to buy additions to the app from within the app. This is most popular in games in the form of extra lives or equipment, but all kinds of apps make use this strategy.
And here’s the kicker: In-app purchases can’t be pirated (at least not yet). Hence the developers eliminate the use for pirating by giving away the app itself and adding more and more expensive in-app purchases – making more money for both the developer and Google.
It’s expected that this tendency will continue to rise, and even as of now, only 4 out of 15 of the top grossing Android apps are paid apps. The other 11 have managed to make a huge profit from giving away the app for free.
At this moment, it seems like business as usual:
Google’s income is being threatened from outside but comes up with a clever solution to turn the situation around and make even more money.
It’s not a coincidence that Google is successful in almost everything they do – including entering the app market.