Revenue share plays small role in app developer platform choice

Consumer demand, device usability and effectiveness of app stores more important to developers than revenue-sharing model when deciding which mobile platforms to work on, industry watchers say.
Written by Kevin Kwang, Contributor
A clarification was made to this story. Read below for details.

Consumer demand for the app, usability of mobile device used to download apps and effectiveness of an app store's distribution model are more important to developers than the revenue proportion stipulated by the platform owner, industry watchers note.

Currently, Apple, Google and Research In Motion (RIM) take a 30 percent cut from developers that publish their apps on the three app stores, App Store, Android Market and BlackBerry App World, respectively. It was only in July this year that RIM upped its revenue ratio to match that of Apple and Google, having previously charged a lower 20 percent fees.

A RIM spokesperson said in her e-mail: "The RIM model for developers is based on a 70:30 proportion for paid applications. Whenever developers sell an application, they receive 70 percent of the amount paid by the customer and RIM uses the other 30 percent to cover the operational expenses of maintaining the store."

Any price difference between app stores probably will not matter much, though, Claus Mortensen, IDC Asia-Pacific's principal of emerging technology research for its practice group, said in an e-mail.

He explained that developers ultimately want to develop apps for platforms that are popular with customers, and their popularity is mainly tied to the device the apps will run on--whether it is an Android-powered smartphone, Apple's iPhone or RIM's BlackBerry device.

"If a particular app is in demand, the developer will want to address as much of the market as possible and thus expand their offerings on other available platforms," Mortensen added.

The IDC analyst's point is reiterated by Frost & Sullivan's senior industry analyst for ICT in Europe, Saverio Romeo. He noted that more than the proportion of the revenue-sharing ratio, it will be the areas of content quality, engagement with consumers and the ability to monetize this engagement that will determine the success of an app store.

That said, Mortensen did add that any difference in revenue takings may "create murmurs among small developers". For this group, differences in revenue might be significant and may affect their choice of platform to develop for, he said.

Paid apps support great, but not critical
While users around the world can access paid apps on Apple and BlackBerry devices, Google currently does not support paid apps in most parts of Asia.

Should the search giant start doing so, it would be a "great incentive and opportunity" for developers to better monetize their software through the Android Market, according to a Singapore-based developer.

Chua Zi Yong, an Android developer and the founder of CodeAndroid, which is a forum to help Android developers and users learn more about the platform, told ZDNet Asia in a phone interview that because the Android Market come pre-installed with all Android-based handsets, turning on paid apps support will definitely help developers generate revenue.

Analytics company, Distimo, this week reported that Google had added 13 countries including Singapore, Hong Kong and Russia to its original list of 14 countries where users can access paid apps in the Android Market. But, the report noted its uncertainty over whether the company has enabled customers to purchase these apps from the Market, and if the 13 countries are the finalized list that will support paid apps in the near future.

When contacted, a Google spokesperson did not confirm the introduction of paid apps to the new markets highlighted in the Distimo report. Instead, she said: "We're working hard to bring support for paid [Android] apps to new countries around the world but have nothing more to announce right now."

The lack of paid apps support does not faze CodeAndroid's Chua, though. He pointed out that "experienced" Android developers would have already figured out how to sell their apps outside of the Android Market even if official Google support has yet to be introduced in Singapore.

"The Android app distribution system is unlike Apple's App Store where everything is neatly packaged for users," he explained. "Because of its open source nature, there are many alternative distribution channels through carrier app stores, third-party app distributors and app aggregator Web sites that developers are using to sell their apps."

Chua revealed that the days when developers make "millions of dollars" by selling apps through dedicated app stores are over. The sheer number of apps in both the Android Market, which currently has more than 70,000 apps, and Apple's App Store with its 200,000-plus apps, has reduced visibility for apps among consumers. This, he noted, is hurting developers' revenue.

"Today, the fastest and best way for developers to make money, regardless of the platform, is to partner telcos to have their apps preloaded into handsets," he suggested.

Clarification: RIM has clarified that it currently takes a 30 percent cut of revenue from developers that publish their apps on its BlackBerry App World, and not 20 percent as it previously said. The story has been updated with the correct figures.

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