There’s been a lot of buzz recently over the IHS Screen Digest Table: Global Mobile Applications Store Ranking in 2010 and 2009. Though I’m sure you’ve seen it in many articles, I’ve included here for reference.
Most of the buzz related to this chart has revolved around people saying either Apple still dominates, Android has a weaker showing than expected, or look at how much growth Android has had. Very little has been written about the REAL story that chart is showing: BlackBerry App World generates a higher revenue per app than any other store — by a wide margin. Guess you better drop all your iPhone devs and get working on BlackBerry projects right?Well, maybe, but drastic action to statistics is usually a bad idea. Let’s take a closer look at these numbers and I will make the case that BlackBerry gets hosed by the media in terms of coverage (at least positive coverage) for App World and that, while a drop-everything-for-BlackBerry approach is probably not warranted, if you’re still not considering BlackBerry for app development you are seriously hindering your revenue potential for your product.
Revenue per App
The easiest quick-and-dirty calculation that shows how valuable a presence on BlackBerry can be, is to look at how much revenue is generated per application. Yes, Apple has a huge portion of the overall revenue generated but they also have by far the most number of applications on their store.
Let me explain the most important differentiator (aside from revenue) there. The number of apps is the denominator in the simple $/App calculation and varying those numbers changes the perspective a lot. Since the number of apps in each store changed throughout the year, but the revenue number is the aggregate for the year, it’s a little hard to determine the spread of revenue per app.
I chose to look for various sources of recent or late-2010 numbers for apps in each store and then discounted them based on assuming they reached those numbers over the course of the year 2010. Not an exact science by any means but I think a fair comparison.
(Note: I found numbers from 18k to 30k for the Ovi store so I have no idea how accurate that calculation is)
What’s immediately striking is how much more revenue was generated by an app on BlackBerry App World vs. the other stores (and vs. iTunes in particular). You read a lot of media and blog reports about how you should develop for iPhone because that’s where the money is and how hard it is to make money on BlackBerry — but the numbers don’t bear that out. In fact, this simplistic calculation of an approximate average revenue per application shows that BlackBerry is significantly more lucrative than iPhone — and these numbers don’t take into account the millions of dollars generated via BlackBerry application sales on carriers and off-carrier decks (e.g. BPlay, Handmark, Mobihand, etc.).
Revenue per Paid App
One aspect of those numbers not taken into account is the amount of free apps on each store. In theory, free apps don’t generate revenue. When reading statistics about the percentage of free apps on each store the source never mentions what percentage of those free apps generate revenue via in-app purchases, advertising, etc. But, if we just make a simplistic assumption (for demonstration purposes) that no free apps generate revenue (or maybe more accurately that the majority of free app generated revenue is not calculated in the aggregate revenue numbers for those stores) then we can see an average revenue per paid app:
The free ratio (percentage of apps that are free) were gleaned from various sources and I took the numbers most commonly quoted and as late in the year as possible. Again, take this as a representative comparison not qualitative metrics. The relatively lower percentage of free apps on App World normalizes the revenue per paid app relative to looking at all apps as the simple denominator — but still shows a 26% gain by releasing your app on BlackBerry vs. iPhone.
What does it all mean?
If every store released all their numbers publicly with a breakdown of free/paid and initial purchase/in-app purchase/advertising revenues it would make it much easier to compare. In the absence of that, we need to use as much information as possible to make informed inferences and headlines rather than sensationalize the data or only quote half-truths.
Does this data mean you will make 26% or 41% more on an equivalent BlackBerry app than iPhone? No, of course not. Different apps appeal to different demographics and you might make more than that difference on BlackBerry if your app is appealing to the BlackBerry demographics or you may make less than on iPhone.
There’s definitely development costs to consider but the truth is, you don’t need to support the full gamut of BlackBerry models to obtain the majority of your revenue. If you cover the BlackBerry Bold, BlackBerry Tour, BlackBerry Torch and new BlackBerry Curve (85xx) series of devices, you’ll be hitting the vast majority of BlackBerry users and those devices all run at least BlackBerry OS 4.5 (many are upgraded to BlackBerry OS 5.0 now) so there’s not even a huge number of major OS variations to accommodate.
The truth of the matter is that BlackBerry has a lot of revenue opportunity as a platform that is being ignored by many developers who fall into the trap of just taking the sensationalistic media reports that like to latch onto iPhone and Android numbers and discount BlackBerry off-hand as an opportunity. Don’t be afraid to try out BlackBerry as a development platform for your application — I can tell you from years of development experience on BlackBerry, it’s not rocket science to support it and there’s many companies making good revenue on BlackBerry; you could be one of them.
EDITOR NOTE: This article was republished from Jeff Bacon’s blog Bacon on the Go. Jeff is a long time contributor to BlackBerryCool who has been in the mobile space for over a decade. Read his blog for his comments on the smartphone and mobile industry.