Google Play making serious run at Apple’s App Store

The battle for control of the mobile device market is heating up in an area long dominated by Apple—mobile application downloads.

Google, developer of the Android operating system for smartphones and tablets, announced in a blog post Sept. 26 that users have downloaded mobile apps from the Google Play store more than 25 billion times since it was launched in 2008. The search and internet advertising giant also said that the number of apps available on Google Play has reached 675,000.

Google’s blog post came six months after Apple’s App Store hit the 25 billion download milestone and two weeks after Apple revealed at its iPhone 5 launch event that its App Store had 700,000 mobile apps available.

Apple once had a comfortable lead in the number of apps offered. After the company revealed in April 2010 that it had reached the 250,000-app threshold, it took Google 15 months to reach that mark, which it did in July 2011. Since that point, Google has gained ground on Apple.

Google Play’s growth spurt should catch the attention of companies that have launched mobile apps or are considering doing so. While Android has surged well ahead of Apple’s iOS in the battle for market share among mobile device operating systems, as shown in a September report by IT research firm Gartner, Apple’s lead on the mobile app front had helped convince many organizations to develop corporate apps for the iOS in lieu of, or before, launching an Android app. With Google Play’s download volume catching up to the App Store’s, companies may now place higher priority on Android apps.

Rapid growth in mobile apps

Developing for iOS will remain attractive, especially after iPhone 5 sales topped 5 million units in the device’s first three days on the market. The Gartner report released in September predicts that Apple will see a 74% jump in App Store downloads, to more than 21 billion, in 2012. In that same report, Gartner forecasts that Apple’s App Store would account for more than 45% of the 45.6 billion downloads from mobile app stores worldwide this year.
  
“Apple’s market share is the largest, considering its App Store accounts for 25 percent of available apps in all stores,” Brian Blau, a Gartner research director, said in a news release.

But that market share is shrinking, and not only because of Google Play. While Apple requires that all apps sold to the public for iOS devices (iPhone, iPad, and iPod Touch) be offered exclusively through its App Store, Google does not restrict Android apps to Google Play, opening the door for myriad third-party stores offering mobile applications for hundreds of Android-powered mobile devices.

“Amazon has appealed to users with its strong brand, global presence and a good selection of high-quality content while Facebook’s recently launched App Center—supporting both mobile devices and desktops—will become a powerful competitor due to its strong brand and leading position in social networking and gaming,” Gartner research director Sandy Shen said in the news release. “In China, there is a boom market of independent Android stores, due to the lack of presence of Google Play and ‘weak’ stores from (telecommunication service providers). We expect to see more new entrants to the market, aiming to deepen relationships with their customers and/or to capture some of this growth market.”

You can’t beat ‘free’

Another factor for companies to consider in refining their app development strategies is that the vast majority of mobile apps are free to download, a trend Gartner sees accelerating through 2016, as shown in the table below, which shows mobile app store downloads worldwide.

Mobile App Store Downloads (millions of downloads)

Source: Gartner (September 2012)

While Gartner foresees the percentage of free mobile apps rising, the company also projects a 650% increase in the number of paid mobile apps from 2011 through 2016, with the vast majority of those apps on the low end of the price spectrum. 

“In terms of the apps that consumers are buying, 90 percent of the paid-for downloads cost less than $3 each,” Shen said. “Similar to free apps, lower-priced apps will drive the majority of downloads. Apps between 99 cents and $2.99 will account for 87.5% of paid-for downloads in 2012, and 96% by 2016.”
 
—Jeff Drew (jdrew@aicpa.org) is a JofA senior editor.