iOS devices bring Apple $576.3, Androids cash in only $3.5 to Google
Android revenues are a closely guarded secret, but it seems that a court filing has finally revealed them and there's nothing to brag about. Google seems to have a sustainable business with Android as long as it can keep the exponential growth of the platform but it reaps little revenue, and actually it gets much more from iOS handsets. Here's the maths behind this conclusion.
It all stems from a recently held judicial hearing where Google ceded to pay Oracle $2.8 million and 0.515% of Android revenues on an ongoing basis. If Google agreed to pay 0.515% of Android revenues, it only makes sense that $2.8 million is actually a cumulative 0.515% of all Android revenue so far, from 2008 to 2011. Basic math shows that total Android platform revenues stand at $544 million from 2008 to 2011.
Now, obviously revenue is scattered differently across those four years, so we’d need to look at Android’s exponential growth and the overall installed base. Again, it’s logical to assume that as install based grew, so did the revenue. Luckily, all of those stats are available and neatly compiled in graphs by Horace Dediu of Asymco.
All of this comes with another important assumption and that is revenue per device. It could have changed upwards, or downwards, but for the sake of simplicity, it’s assumed that it remained stable throughout the years.
With this in mind, we arrive at Google revenue per handset per year of merely $1.70.
Does the figure make sense? Google actually revealed “mobile run rate” of $2.5 billion in October 2011. And mobile here includes everything - iOS, Symbian and others where Google services are present. Again, if we interpolate the Android revenue data we arrived at to the overall “mobile run rate” of $2.5 billion, we’d see clearly that Android is only a fraction of Google’s mobile income.
The Guardian’s Charles Arthur suggests that if we subtract Android from the overall mobile income, we’d arrive at Google’s revenue from iOS. And the results are eye-opening - iOS brings 4 to 5 times more revenue to Google than Android (again, with all those assumptions in mind).
In 2011 alone, iOS brought five times more revenue than Android. iOS brought $8.33 in revenue to the search behemoth, while Android cashed in $1.70.
And if we take an average 2-year lifespan for an Android device, we’d see that Google makes around $3.50 from it. Apple - in stark contrast - has $576.3 for each iOS device sold in 2011. The numbers speak for themselves, don't they?