Google, Apple, or Microsoft: Which Platform Is the Most Profitable for Mobile App Developers?

The top mobile operating systems, namely Apple's (AAPL 1.27%) iOS, Google's (GOOG 0.74%) (GOOGL 0.55%) Android, and Microsoft's (MSFT 0.37%) Windows Phone and Windows 8, not only compete fiercely for mobile device market share, but also for mobile app developers.

App downloads are a good source of revenue for these companies. The more lucrative a platform is for developers compared to its competitors, the easier it is for the platform to attract even more developers and, consequently, increase revenue from app downloads.

Google has the lion's share of downloads, but Apple laughs all the way to the bank
Google Play apps enjoy roughly 50% more downloads than App Store apps. Google Play also accounted for 75% of total downloads last year, compared to just 18% for App Store. App Store, however, made twice as much money as Google Play last year. The platform made a whopping $10 billion, or about 5.9% of Apple's fiscal 2013 revenue, from app downloads.

App Store managed to generate only $3.6 billion in revenue in the first two years after its 2008 inception, and the latest data illustrates how quickly app revenue is becoming a significant revenue source for Apple.

iOS is the most lucrative platform for mobile developers
According to VisionMobile, iOS continues to be the most lucrative mobile platform for developers, with a median revenue per app per month of $500-$1,000. This is how the different platforms compare:

Source: VisionMobile

Apple revealed at its latest WorldWide Developers Conference that it had 1.25 million apps in its App Store with more than 50 billion downloads to date, and had paid $5 billion to developers in fiscal 2013 alone.

On the other hand, Google touted the 150,000 developers at its I/O conference who are responsible for the 800,000 app in its Google Play store.

Microsoft, meanwhile, claims that it has accumulated 160,000 apps and has 45,000 developers. According to the company, the average user downloads 54 apps, which implies that 650 million Windows apps have been downloaded to-date. 

Sources: Apple WolrdWide Developer Conference, Google I/O

Microsoft's Windows platforms sport the highest revenue per download of all the mobile platforms. But, the low number of downloads results in developers making much less revenue per app than either iOS or Android developers.

Source: Author's calculations

Android has a much bigger cache of free apps, which deeply cuts into Google's average revenue per download. The big question is, how much can a developer on any of the three platforms expect to make from his or her app?

Real impact on a developer's wallet
You can get a good sense of the amount of revenue an average developer makes on any of the three platforms by multiplying the average revenue per app by the average revenue per download for each platform. Here's how it works out:

Source: Author's calculations

Apple is the clear winner. These figures are, of course, just averages, and there are bound to be wide variations in the amount of revenue any app pulls in. But, it's quite safe to say that Apple developers make the most money from their apps, followed by Google and Microsoft, in that order.

Other than money paid directly for downloads, developers usually earn extra cash through in-app advertising. Most ads are remunerated on a pay-per-view basis, meaning the more downloads per app, the higher the ad income.

Opportunities for growth
Both Google and Microsoft mobile development platforms have room for improvement. For Google developers, the big challenge is monetizing free apps. If Google could find a way to increase the monetization of its apps by 50%, the company's significantly higher number of downloads would place it on an even footing with Apple.

For Microsoft, the challenge is to increase the number of downloads per app. The Windows Phone platform has been steadily growing, and IDC forecasts that it will reach a 7% market share, almost double the 3.6% share it had in fiscal 2013. This will likely lead to comparable growth in the number of downloads per app and, hence, increase the revenue per app for Windows developers.

Foolish bottom line
iOS developers enjoy significantly higher revenue per app than their Android and Windows counterparts. Naturally, more mobile developers have been gravitating toward the platform, which helped Apple record impressive revenue in recent times. Although both Android and Windows might close the gap between iOS, there is no reason to believe they will overtake it anytime soon.