One way Google could beat Apple: better ways for developers to make money on apps

A smartphone is only as good as its software—and most of what’s on the average iPhone isn’t made by Apple.
A smartphone is only as good as its software—and most of what’s on the average iPhone isn’t made by Apple.
Image: AP Photo/Margarethe Wichert
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Right now Apple is riding high on one very important phenomenon that is too often overshadowed by gee-whiz coverage about the latest fingerprint sensor. It’s the strength of the offerings in Apple’s App Store, which has a lot of good apps in it because of simple economics. It’s the place where developers can make the most money—more, in aggregate and on average, than on Google’s Google Play store.

Google’s current strategy is to simply grow the Android market to the point that even if it’s harder to develop for Android phones, there are so many customers on its operating system that developers won’t be able to ignore it. But there’s another way: Google could give developers more ways to sell their apps.

Selling apps the way developers used to sell software

As mobile analyst Ben Thompson pointed out in July, Apple has made little or no effort to help developers make more money on its app store by allowing free trials of paid apps, paid updates to apps or built-in support for subscriptions to apps. All of these are important ways companies like Adobe and Microsoft make money on productivity software sold for traditional PCs.

In other words, while it seems natural that the price of apps should be trending toward $0, it doesn’t have to be the case for sophisticated software that doesn’t have many competitors, like high-end productivity software.

Some developers of software for Apple’s App Store have tried strategies like upgrade pricing, but Apple has told them that if they continue, they’ll be banned from the App Store.

Enter Google: If Google can get creative about how it lets developers push their apps through the Google Play store, it opens up ways for them to make money that simply aren’t available through Apple. As our mobile devices continue to take over more of the tasks we used to rely on PCs for, this represents an opening for Google to push Apple aside—not to mention undercut mobile app store efforts by Microsoft, which may finally get traction with Windows 8.1 and the Surface 2 tablet.