Google has just made a substantial change in it’s mobile business. We are all well aware that a little over a month ago Google changed the Android market to the “Google Play Store” in an effort to streamline all it’s downloadble content. We also heard last week substantial rumors that Google will sell their “Nexus” tablet direct via a webstore and subsidize it for content.
As many tech sites have suggested (as well as us), Google is reacting to Amazon’s success with the Kindle Fire tablet. Amazon is not only running a customized version of Android, they are also shutting Google out from any sales of apps by hosting their own app store.
Google often touts how they make no money off Android itself. Their money comes from mobile ads and more mobile devices means more mobile ads. But that’s not to say Google doesn’t want to start making money off their downloadble content.
More, after the break
New research from Flurry further reiterates the point that Google needs to start making more money off of apps and downloads.
Apple recorded a record 25 billion downloads earlier this month off of 500,000 available apps. In December 2011 Google reported that they had reached 10 billion downloads with 400,000 available apps. One would assume that the Google Play store would be somewhat close to Apple’s App Store, with those kind of numbers. Well, while Apple is the app revenue leader, Google is not the runner up.
Flurry reported on Friday that for every $1.00 in app revenue generated from their App Store, Google only makes $.23 in the Google Play store. Amazon is the second place winner with a whopping $.89 for every one of Apple’s dollars. As you’re probably aware, the Amazon App Store and the Google Play store offer just about the same apps. It’s also important to point out that, for this study, Flurry is addressing revenue, so paid apps.
Flurry speculates that the success of both the Apple App Store and the Amazon app store, over the Google Play store, could come from each companies “DNA”. Apple has been involved in the retail business, and consumer sales, since just about their inception. Amazon has been in the web based sales business since their conception as well.
Google, on the other hand, is a search and free web services company. We’ve often suggested that the reason it’s harder to sell an app in the Google Play Store (previously Android Market), is because Google users are preconditioned to getting things from Google for free. Not only that but with virtually no first hand knowledge in the retail or direct to consumer sales business, Google has more than an uphill battle to climb.
Google tried their hand at direct to consumer marketing by opening up a web store for the original Google Nexus One. That proved to be a fruitless effort, the direct to consumer business model for the Nexus One was quickly shuttered.
Google may have already been privy to the information that Flurry reported, two months ago as they started to embark on Google Play.