The lawsuit between Oracle and Google is inadvertently revealing some confidential information about the companies. It has already been disclosed that Google paid Apple a $1 billion fee in 2014 to keep Google as the default search provider for iOS Safari, as well as a revenue sharing agreement where Google gives a substantial portion of the iPhone search ad revenue to Apple.
Another lawyer from Oracle has also stated that Google has generated $22 billion in profit and $31 billion in revenue from Android in its lifetime, via Bloomberg. Although any number in the billions is impressive, it pales in comparison to Apple’s mobile platform profiteering. As highlighted by Quartz, Apple made more revenue from the iPhone in one single quarter, raking in $32 billion dollars worth of iPhone sales from July – September.
Obviously, there are some qualifications which explain the huge discrepancies somewhat. Most notably, Google doesn’t really make or sell its own hardware. Almost all Android revenue is derived from the Google Play Store developer revenue share (like Apple, Google has a 70/30 split) or ads shown from Google’s phones. Apple’s highly successful hardware business is better stacked to give higher margins, and with higher margins comes higher profits.
So, whilst this figure is more symbolic than anything, it is significant in showing Apple’s success with the iPhone in general. Remember: Apple and Samsung are the only manufacturers to make money from smartphones. Everyone else consistently loses money. The risks associated with the hardware business go often overlooked, but Apple is reaping the rewards from its success.
Even looking at software sales numbers, Apple is close to Google’s numbers. Apple last announced the App Store had raked in $40 billion for developers. That means Apple generated at least $17 billion in revenue from App Store. Adding in partner deals like the $1bn Google Search arrangement, iOS’s software-only numbers are approximately half of those reported for Android, which relies on only software app sales and ads for its business model. It’s impressive however you slice it.
FTC: We use income earning auto affiliate links. More.
“Android numbers are significantly higher than shitty iOS. Google is much more successful than Apple ever will be”
-Average Android User
Depends on perspective. If you care about market penetration, then yeah, Android has been much more successful than Apple. However, if it’s all about the money, then Apple is kicking some serious ass
I agree. Market penetration only matters if your company eventually makes money from it, so for Android, the only people making money are the manufactures of the device itself, which is not Google unless you buy their Nexus.
Except they really aren’t. Google is very close to overtaking Apple as the richest company in the world.
“Google is very close to overtaking Apple as the richest company in the world.”
Apple has $200B in cash… is Google overtaking Apple?
Hilarious! ^^^^^^^
Apple doesn’t go after the lower priced smartphone market. At least as of yet. Until recently, Apple has charged $450+ for their smartphones, Android phones can be bought for as little as $50 for a low end unlocked smartphone, which I’m sure is a product that loses money for the mfg. Also, Apple has to pay for their own OS development whereas the Android OEM’s don’t spend hardly anything in comparison to the development of the OS, OS development tools, etc. Aside from Samsung, Apple has their own processor development group, with the OEM’s other than Samsung, they just use off the shelf processors they buy from someone else, so their costs are less than Apple’s. No one knows how much they pay for the processor compared to what others pay.
The other area that helps Apple’s margins is that they offer the AppleCare warranty which most of the OEM’s don’t offer. That’s what helps Apple achieve the larger margins, plus when Apple sells an unlocked phone directly, they get full MSRP, when Apple sells an unlocked phone through a reseller, they get less money since it’s priced lower. Apple does get a lot of direct sales at full MSRP. When Apple sells the 2 year contract phones through a specific cellular carrier, I believe they are discounted to the carrier.
The lowest price I paid for a “decent” Android phone was $8 straight from Verizon using a $100 upgrade coupon about a month ago. I never use it over my 6S but it doesn’t hurt as a backup. I plan on using it on my motorcycle. The phone actually retailed for $500 2 years ago.
Their basically giving these phones away. During Black Friday I bought a Nexus 6 for $200 which is a steal. I use that phone to watch movies on the elliptical at the gym.
On the contrary, Apple is far more successful in the metrics that matter.
Apple now has close to 800 million ACTIVE iOS devices around the word according to JackDaw Research, 57% of Google’s 1.4 Billion Active Android users. Apple sold 291 million iOS devices in the last 12 months alone 231 million of which were iPhones. That is up 36% from the previous 12 months.
Apple also has over 1 Billion ACTIVE iTunes/App Store users most with credit cards and Apple continues to be Number 1 in Music Retail and already grabbed the number 2 spot in paid streaming music subscriptions after only 3 months
However, more importantly,, Apple’s mobile ecosystem couldn’t be stronger, absolutely dominating Android in all the metrics that actually matter:
3rd party iOS developers now make 80% more revenue than all Android developers, up from 70% last year according to App Annie and IDC ensuring that iOS will continue to get the best apps first with Android only getting a poor port sometime later or not at all. Vision Mobile reports “Apple owns the high end. The iOS ecosystem appears to have a lock on the high end that will be hard to break”
“Android handset makers are increasingly unable to compete effectively for the premium customers. Those are the customers that are most interesting to well-funded developers, as well as advertisers, retailers and various service providers….The result is that most developers who are primarily interested in revenue target iOS first”
In terms of third party e-commerce revenue, the iOS platform generates 400% greater revenue according to IBM and Adobe than all Android users put together.
iOS users generate 1,790% greater Advertising ROI than Android users according to Nanigans, but worse It’s not just that Android monetizes worse than iOS — it actually offers negative return on investment. In other words, while advertising on iOS brings retailer 162 percent more cash than they spend on the ads, advertising on Android returns 10 percent less than the cost of the ads.
That doesn’t sound good for Google who makes 90% of their revenue from advertising does it?
Apple is number 1 in Enterprise Mobile with 64-78% market share with growth of a massive 40% generating an enormous $25 Billion last FY (and that doesn’t include BYOD devices!) .
Of course Apple also captures 94% share of the profits of the entire mobile phone industry up from 87% last year and 75% the year before that, while Samsung has sunk to 9% and falling off a cliff. That doesn’t add up to 100% because every other Android OEM is making terrible losses every year.
That doesn’t sound healthy for Android either does it?
As such, all the evidence indicates that it is Google and Android, not Apple who should be worried about the future.
Need I say more?
Yes – please do. I hang on to your every word.
Actually, you said nothing. But that’s good. Stick with your strengths.
🐖💨
🐖+💄=🐖
why are you comparing hardware to software
I thought java was free for all to use?
“Apple last announced the App Store had raked in $40 billion for developers. That means Apple generated at least $12 billion in revenue from App Store.”
Benjamin, if you are multiplying $40 billion for developers times 30%, and arriving at $12 billion for Apple, you’re doing the math incorrectly. If developers or paid $40 billion, grocery Avenue would have been about $57 billion, 30% of which would give Apple about $17 billion.
Yeah Benjamin the numbers are much closer. Apple is a big treat to Google’s software business. Also add $1 bn google search revenue per year, plus iAd revenues.
When I said “grocery Avenue” I meant to say “gross revenue.”
Dictation works great sometimes, And, sometimes, it is not.
I thought grocery avenue might have been hip slang like “gravy train” and was kind of digging it until you posted the update.
I saw alphabet soup in the grocery comment leading me to think you were making a play on Alphabet Inc and therefore Google. They are both great companies making great products. Apple’s homogenous environment has always just worked better. I prefer my iPhone to my Android, but I own both companies’ stock.
Totally going to try making “grocery Avenue” a thing. Feel free to use “fire barker” for lighter. W/e
We’re gonna rock down to the Grocery Avenue,
Google tried hard to prevent this data being revealed!
The crazy thing is that in the past year Google’s stock went up 40% and Apple’s went down 11%.
Markets, investors and analysts are apparently not very smart! They are feeling stupid right now!
Yes, if you made 40% on your investment rather than negative 11% this past year, you are probably just kicking yourself!
Yes, the best thing to do is to make 40% on GOOG, and now, when investors start to find out, buy with that money AAPL.
Profits V Sales.. Not exactly comparable
Both profit and sales were listed for Google. 31bn lifetime Android revenue vs 32bn one-quarter iPhone revenue.
Use a dictionary please. “Profiteering” does not mean what you think it means. It’s certainly not the same as “profit,” the word you should have used in the second paragraph.
Google don’t give a rat’s ass about profit from Android so long as it lets them maintain the stranglehold on search. It’s all about controlling the destination, being the keymaster to the pipeline for them.
So true. Making money off Android is not Google’s business model. They are probably tickled pink that they’re not losing money with it.
The reason they created Android is to provide as many cheap devices in the market as possible. They know that more devices means more searches and more advertising being clicked on. That’s where they make their money.
What does Vinz Clortho have to do with any of this?
Trouble is, Google is not making much profit from mobile advertising on Android either.
iOS users generate 1,790% greater Advertising ROI than Android users according to Nanigans, but worse It’s not just that Android monetizes worse than iOS — it actually offers negative return on investment. In other words, while advertising on iOS brings retailer 162 percent more cash than they spend on the ads, advertising on Android returns 10 percent less than the cost of the ads.
75% of Google’s mobile search revenue comes from their deal with Apple to be the default Search engine on Apple devices and Google’s Cost per Click (CPC) revenue has been plunging for the last 15 consecutive quarters.
With Apple marginalising Google more and more on iOS with Siri bypassing Google for search and Apple Maps bypassing Google Maps and the prospect of Apple kicking them from their default Safari search engine status, Google is far from controlling the destination or the pipeline.
profiteering
make or seek to make an excessive or unfair profit, especially illegally or in a black market.
“the profiteering of tabloid journalists”
synonyms: overcharge, racketeer; More
Is this what the author of this piece thinks of Apple? Really?
Ben is from England, I think Profiteering is just how you say profit in an English accent across the pond.
Nope. I looked it up in the Cambridge Dictionary and the word is pejorative in England also. I think Ben either didn’t know what the word means or he did and used it to imply Apple makes its profit unethically.
Completely meaningless/useless comparison.
Apples to oranges. See what I did there?
I rest my case…
Judge: “Alright, counsel, we’re ready to hear your opening statement.”
The Amazing Iceman: “Your Honor, ladies and gentlemen of the jury…I rest my case…”
*The gallery erupts into applause. Numerous jurors weep openly.*
Recently just have a chance to own an Xiaomi Android phone, frankly speaking quite fluid with MIUI clean and light customisation. Animation execution is even faster than my iPhone 6 Plus. As a hardcore Apple fan, Apple has to be serious now. The only bad thing of Android is their privacy permissions and settings. They are all too complicated to do the setting and messy also.
Is this even a valid comparison? How can you compare revenue from iPhones (Hardware) with revenue from Android (Software)?
“How can you compare revenue from iPhones (Hardware) with revenue from Android (Software)?”
I think by using the dollar amount.
“Apple’s highly successful hardware business is better stacked to give higher margins, and with higher margins comes higher profits.” This has nothing to do with the numbers. The numbers are based on revenue, not profit. Even if Apple’s profit margin were 1%, the revenue number wouldn’t change. This statement should not have been given as a qualification to the story.
“Apple’s highly successful hardware business is better stacked to give higher margins, and with higher margins comes higher profits.”
This has nothing to do with the numbers. The numbers are based on revenue, not profit. Even if Apple’s profit margin were 1%, the revenue number wouldn’t change. This statement should not have been given as a qualification to the story.
I do not understand the joy and glee about how much one’s favorite company makes off of their consumers. I greatly prefer a “moderately” successful company who has the revenue to bolster “innovation” and bring new and improved products to market than be absolutely wowed and amazed at how much of my money went out of my pocket and to my favored company’s coffers. Profit = revenue – expenses, right? That means that is over and above what it cost to research and design, make, market, ship, and support the device in my understanding. I don’t care if the company that I favor has only $1 of profit if it means that I keep more of my money in my pocket, but that’s just me.
You’d better care about company profits because manufacturers that don’t generate profits end up leaving you with orphan devices that have no support and don’t get OS, firmware or security updates or new developments and technologies.
With Apple capturing 94% of the profits in the entire mobile industry and Samsung only managing 9% and falling, the rest of the world’s Android device manufacturers are LOSING hundreds of million of dollars (Billions in some case) every year and are scratching to survive.
Android is Open-Source, so the title is hilarious.
Weird seeing a common sense comment here. Thanks!
So comparing apples with oranges is journalism now? Funnily, you’re making money via Google Ads, too ;)