Apple iPhone Store Eclipses Android Market in Paid Apps

Apple's App Store remains the mobile application market of choice for developers to get not only placement, but paid. Android Market is hampered by billing options, but Android users click on more ads.

Google's Android operating system may be riding high in 2010, but Apple's App Store remains the mobile application market of choice for developers to get not only placement, but to also get paid.

Application users who frequent Apple's App Store download nearly twice as many apps as those who go to the Android Market or the BlackBerry App World Store, according to a Nielsen report on the state of mobile apps.

Moreover, Apple App Store customers said that for every two free apps they download, they typically pay for one.

However, app users who navigate the Android Market and BlackBerry App World report more than 3.5 free apps for every one they buy.

There are key reasons for such details from the Nielsen report, based on an August 2010 survey of more than 4,000 mobile subscribers. Nielsen opined:

"This may be due in part to the browsing interface on the Android Market, which makes it easy to browse free titles exclusively. However, we also know that Android owners tend to be younger and less affluent than iPhone users."

That obscures the more practical reason: Apple has far more apps and greater billing coverage.

Apple's App Store sports roughly 250,000 apps, providing more than twice as many options as Android Market's 85,000 apps or App World's 10,000 or so apps.

The barrier for entry to paid apps on Android Market is significantly higher. Android Market only enables developers to sell apps in nine countries, compared with 95 regions for the App Store.

Moreover, Nielsen found app users prefer to have app charges appear on their cell phone provider or credit card bills.

Only T-Mobile, the United States' smallest wireless carrier, enables customers to purchase Android Market apps through their phone subscription accounts.

Nielsen's research about paid versus free apps dovetails with findings from Royal Pingdom, which noted that about 70 percent of the apps in Apple's App Store are paid. Conversely, 64 percent of the apps in the Android Market are free.

There is also an interesting nugget about mobile ad behavior on the iPhone and Android devices. As one might expect, teenagers are more receptive than their elders to mobile ads.

Fifty-eight percent of teens said they "always" or "sometimes" look at mobile ads.

Moreover, Nielsen said users prefer to view mobile ads within an app, somewhat validating Apple CEO Steve Jobs' argument that applications are where people want to find information.

Indeed, iPhone users are the least interested in having ads take them outside of their application, Nielsen said. That bodes well for Apple's iAd platform.

Yet here's an interesting morsel that may pain Jobs. Android users are more likely to click on an advertisement within an app, presenting a nice monetization strategy for anyone targeting the Android user base.

That's good for Google's AdMob and AdSense for mobile. If only Apple's iAd found its way onto some Android phones to capitalize on this trend. But that isn't going to happen because Apple's platforms tend to be self-contained.