Google Play grows in Japan, other Asian countries

But Apple's App Store has four times the revenues, analytics firm says

Apple's App Store generates four times the revenue of Google Play, but Google's sales of apps are growing fast in South Korea, Japan and India, according to a new monthly index released Thursday by analytics firm App Annie.

The growth of Google Play in Asian countries has been so robust that Japan exceeded the U.S. for the first time in Google Play revenues in October, said Ollie Lo, vice president of marketing for App Annie, which is based in Beijing and San Francisco.

Google Play revenues grew 311% from January to October, while App Store revenues grew 13%, Lo said in a telephone interview. He didn't release dollar amounts.

"Google Play is catching up with Apple's App Store," Lo said. "The Android platform is doing a good job at getting more publishers of apps."

The success in Asia for Google Play is partly because more people use smartphones and tablets in Japan and South Korea than other countries. The practice of making in-app purchases is also more popular in those countries, as compared to the U.S. and other Western countries, Lo explained. An in-app purchase is when a mobile game player adds functionality or features while playing a game at a small cost, or when a user decides to add more functionality to a productivity app.

Mobile users in many Asian countries have gone online to play games for years, Lo said. The games are free at first, but a fee is charged to add functions later on. As a result, apps publishers in those countries have become "real trailblazers for in-app purchases," Lo said.

App Annie found that eight of the top 10 revenue producers for Google Play in October were based in either Japan or South Korea.

While App Annie did not publicly release revenues or numbers of downloads for either app store, other analyst firms have publicly released some of that data. For all of 2012, IHS iSuppli projected that Apple's App Store will take in $4.9 billion in revenue, up from $2.9 billion in 2011.

Since the App Store is expected to earn nearly $5 billion in 2012, that means Google Play is on pace to earn about $1.25 billion in 2012, according to the 4-to-1 revenue ratio that App Annie revealed.

The App Store launched five years ago and offers more than 700,000 apps. In March, Apple revealed that 25 billion apps have been downloaded, with more than $4 billion paid out to developers.

About half of all apps on the various apps stores are free, according to several analysts. An apps business Web site, 148Apps.biz, said earlier this year that about 23% of apps cost 99 cents, while 9% cost $1.99. About 15% range from $2.99 to $999.99.

One finding of App Annie's research is how well some small apps publishers can do compared to large ones. Supercell, the creator of the popular Clash of Clans game, employs about 70 developers and other staff, but earns as much from its two apps as many gaming publishers with 3,000 workers and many apps, he said.

Supercell finished second in revenues in October on the App Store, behind Electronic Arts, and ahead of Zynga, Lo said.

In the case of Apple's App Store and Google Play, nearly all the top 10 apps publishers by revenue were game publishers. The only non-game publisher in the top 10 revenue producers on the App Store was Apple, which provides a range of productivity apps such as iWork.

For Google Play, the only non-game publisher in the top 10 revenue generators was Naver, a maker of messaging and other apps.

App Annie plans to publish its free App Annie Index via a blog each month to show trends on Google Play and App Store, Lo said. More detailed data is contained in a different report sold to the industry that starts at $15,000 for an annual subscription. The data is obtained for the app stores by looking at actual downloads and revenues for 150,000 of the largest apps, and comparing those findings with the rankings of those apps in the markets, Lo said.

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

See more by Matt Hamblen on Computerworld.com.

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Tags Mobile/WirelessGoogleconsumer electronicsNetworkingsmartphoneswirelessmobilemobile appsApp DevelopmentApple

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