iOS devices bring Apple $576.3, Androids cash in only $3.5 to Google

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?



58. Twackamole

Posts: 3; Member since: Apr 04, 2012

android buggy phones.. no updates... WP7 or Iphone... at least you get updates

54. BattleBrat

Posts: 1476; Member since: Oct 26, 2011

Dang, Apple rape'n folk! And the Apple fans are happy apple is making so much money, there is just one problem they fail to see, IT'S THEIR MONEY APPLE'S MAKING. I feel my money is best kept in my pocket, And they don't realize they help google out more than us Fandroids do by buying an iPhone, money coming, money going, BEAUTIFUL!

51. sprockkets

Posts: 1612; Member since: Jan 16, 2012

Oh, you quoted from asymco, the site that never, every reports anything negative about apple, ever. "But he backs everything up with 'facts'! " He still is an biased apple fan boi. Figures don't lie but liars figure.

46. paulyyd

Posts: 340; Member since: Jan 08, 2011

lol i think its hilarious how all android phone are all pieces of s**t :)

47. hepresearch unregistered

I think it's hilarious that iPhones cost less to make than any other smart phone design... thanks to "forced interns" at Foxconn. "Forced", as in "caused to act under duress"... "Intern", as in "someone who works as an apprentice at no cost to their employer"... just a politically-sanitized way of calling someone a "slave" if you ask me.

57. remixfa

Posts: 14605; Member since: Dec 19, 2008

hep hep.. hooray! :) lol

44. SteffenJobbs

Posts: 1; Member since: Apr 03, 2012

But just remember... Android is winning. The little green trashcan OS has captured 50% of smartphone market share. Market share is all that matters to Wall Street and Droid Lovers. Android is fully open to malware, fragmentation and any other crap someone decides to upload. That's what makes Android great for users. Freedom to do anything, good or bad. /s

43. networkdood

Posts: 6330; Member since: Mar 31, 2010

Seems like apple users are proud to see that their favorite company is swimming in cash. Apple does not care about any one customer specifically - unless your have stock in the company, you really are not benefitting from apple getting more money out of a consumer as compared to google. This is why I have an Android phone - I have more control what I do and how I do it and what I can buy. I am not forced to purchase only from the Play market and can download stuff from the internet, like I could with my old windows phone.

38. RabidCB

Posts: 2; Member since: Apr 03, 2012

Google is accomplishing exactly what they intend to accomplish. They are an advertisement company, pure and simple, Android is just a vehicle to obtain cash flow for advertisers. Unfortunately, Android users THINK they are the customer, of which they are not. To Google, the advertiser is the customer. The Android user? He/she is the product being sold. This is why, Android users are drones who line up behind a company that utters the words "OPEN", when everyone and his sister knows they are not open. Open to advertisers and carriers maybe. Once Android users come to realize that they are nothing but a bunch of sell-outs, than maybe they can do something about it and demand Google treat them like customers. But right now, they have their Google colored glasses on and cant see past their nose. Otherwise they will simply go on denying that they are a bunch of advertisement whores like the commentors below.

45. hepresearch unregistered

In that case, congratulations! The average iOS user has saved themselves from being an "advertisement whore" by paying in an extra $573 to their OS provider over the course of two years... while the "advertisement whores" spend less than 1% of that on their OS provider in the same time frame... I wonder if advertisements are actually SAVING MONEY for people? If so, then what in the world is an iOS user doing with that $573 extra cash they are throwing at Apple?

31. hepresearch unregistered

There is no reason for anyone here to be surprised by this unless they've been hiding in a closet for a long time and just joined. Otherwise, I do not understand why anyone here would be surprised by this... unless they are just pretending to be surprised so they can practice being drama queens...

28. networkdood

Posts: 6330; Member since: Mar 31, 2010

This makes sense - I rarely buy anything for my smartphone - too many ways to get it is called 'being smart'. Apple users love to get screwed by paying for something that can be free on an Android phone. Good for Android users and bad for iPhone users, and good for APPLE.

39. gallitoking

Posts: 4721; Member since: May 17, 2011

we paid so we dont have annoying ads..

42. networkdood

Posts: 6330; Member since: Mar 31, 2010

ad block works fine...thanks for playing, bub.

22. Droid_X_Doug

Posts: 5993; Member since: Dec 22, 2010

Based on the limited $ that Google is making from even iOS sales, it should be obvious that Google is not looking at handset sales as its revenue engine. Instead, it's revenue engine is from the searches conducted from the handset. Which explains the 'fee' it paid to Apple to continue being the default search engine on iOS. Apple, OTOH, makes its $ from iDevice sales. The App store and iTunes ecosystem merely serve to feed the demand for iDevices, and Apple's 30% revenue share allows it to basically break even on those costs. Good article. I was wondering about Google's revenues per Android device. Those numbers must have made Larry Ellison go batsh*t crazy. He probably didn't even cover his litigation expense.....

21. remixfa

Posts: 14605; Member since: Dec 19, 2008

ok, that graph obviously does not count the liscencing fees for google apps and the Play store that they charge manufacturers. That is a whole lot of conjecture based on one number. Assuming thats even remotely true. YAAAAY GOOOGLE!!! Way to milk the competition while leaving your own customer's money in their pockets. For all the iOS nuts that are going to comment something derogatory about google, remember, your paying for our OS. Thanks, guys. HA!

34. darkkjedii

Posts: 31817; Member since: Feb 05, 2011

We're happy to help u out, since google can't make one themselves. iOS is boss, google takes the loss.

52. sprockkets

Posts: 1612; Member since: Jan 16, 2012

Oh, so apple made OSX/Darwin completely from scratch? Didn't take a thing from BSD huh?

56. remixfa

Posts: 14605; Member since: Dec 19, 2008

dude, as long as you are happy to not only pay for your phone, but mine, u can keep on making stupid jokes. face it.. google was smart enough to know that crazed inuts are OK with spending money when they have no idea where its going :)

36. RabidCB

Posts: 2; Member since: Apr 03, 2012

"YAAAAY GOOOGLE!!! Way to milk the competition.." Did you mean, YAAAAY GOOOOGLE!!! Way to harvest my data..."

13. PackMan

Posts: 277; Member since: Mar 09, 2012

ios just claims to be secure when its not. bbos used to be secure but it has gone downhill. ios just plain boring nothin but app grid. they just buy hardware from other manufactures and toss it inside a pretty case. they are very hard to repair and repair too costs a fortune.

41. sgogeta4

Posts: 394; Member since: Feb 02, 2011

IOS isn't secure. The US military uses Android for a reason.

12. PackMan

Posts: 277; Member since: Mar 09, 2012

ios devices = ios + hardware with highest profit margin. android = open source platform.

15. gauravbh1

Posts: 10; Member since: Apr 03, 2012

Least open source

35. kanagadeepan

Posts: 1292; Member since: Jan 24, 2012

A walled-Garden is NO WAY better than least open source....

9. Sniggly

Posts: 7305; Member since: Dec 05, 2009

I still think these estimates are low. Besides, it's great that Google is making bank on the services it provides on all devices that use it. For Google, it's never been purely about profit-it's been about making themselves ubiquitous- a goal they've already succeeded at with their online services, and a goal they're pretty damn close to achieving on Android. In fact, I can't imagine their market share increasing much more in the mobile world.

7. donzere

Posts: 12; Member since: Jun 10, 2010

Do y'all know why apple is the KING: because they give you a badass software and a sick hardware to accompnay it. That's why neither google, samsung, htc etc can't compete lmao. And yes i have used android since the day one it came out but after switching to IOS last 3 weeks i just realized how laggy and buggy peice of s**t my galaxy S was..

8. Sniggly

Posts: 7305; Member since: Dec 05, 2009

So what happens the first time your iPhone screws up? (Yes, it happens.)

40. sgogeta4

Posts: 394; Member since: Feb 02, 2011

You do know that Apple is paying Google, Samsung, and all these other companies because these companies actually make everything for Apple.

48. darkkjedii

Posts: 31817; Member since: Feb 05, 2011

Boeing makes some of the parts for cadillac, Ferrari makes domes parts for Chevy. Who cares... Apple competes with these companies, and they pay apple for patents that they use in their software. The wheels on the bus go round and round round and round round and round. Think about it.

* Some comments have been hidden, because they don't meet the discussions rules.

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