By Daniel Eran Dilger
Published: 10:56 PM EST (07:56 PM PST)

A new report suggests that all Android app markets combined will soon outpace the app downloads of Apple's iOS App Store, but a parallel report notes that piracy and malware republishing continue to destroy Android app developers' ability to actually make money.

Ovum research analyst Nick Dillon issued a report cited by CNET stating that the group estimates that a variety of stores serving Android apps could deliver up to 8.1 billion app downloads this year, contrasted with an estimated 6 billion served by Apple's iOS App Store.

The Android platform has lots of software stores in addition to Google's own Android Market, including GetJar and Amazon. The Ovum report noted that Apple "can't compete with such diversity, but still leads in the value of its apps."

The group estimates that five years from now, Apple will be generating $2.86 billion in app revenue, while all Android stores combined will pull in just $1.5 billion, even while it claims Android stores will be servicing almost twice as many app downloads (21.8 billion vs 11.6 billion apps by Apple) in 2016.

Ovum track record not great

In July 2010, however, Ovum predicted that "the dominance of Apple’s iPhone in the mobile app download market will be eroded over the coming years as rivals Android, Symbian and BlackBerry make inroads." That report was made before the implosion of Symbian, BlackBerry and Windows Phone 7.

At that time, the group forecast that by 2015, Apple's share of the app market would plummet from 67 percent of all apps downloaded in 2009 to just 22 percent, while figuring that Nokia's "burning" Symbian platform would take a 19 percent share. It also figured that RIM's BlackBerry and Microsoft's Windows Mobile/Phone 7 would both lose smartphone share but somehow double or triple their app share over the next five years.

The report's author stated at the time that "the iPhone generates the lion’s share of smartphone app downloads but over the period we will see the share of application downloads becoming more equally distributed." Just over a year later, Ovum is now predicting that Apple will retain a massive revenue lead, even as it buries that fact under the more sensationalist idea that Android stores will service a lot of downloads.

Lots of apps, little revenue

Part of the reason Android has so many app downloads is because Google has no real limits on what users can upload into its Android Market. Apps with actual functionality are buried by massive volumes of phony apps that are really just wrappers for wallpapers and ringtones, as any search in the store demonstrates.

However, a larger problem for Android developers is rampant piracy. A study by Yankee Group analyst Carl Howe on Android app piracy notes that "Piracy is a problem for Android and Google isn’t helping."

"Android developers make much less money from paid apps than iPhone developers do," the report notes. While suggesting steps Google could make to help reduce rampant piracy, the report recommends that Android developers "consider adopting business models beyond direct app sales," including ad banners and in app purchases to unlock key features.

Among Android developers, the report states that 27 percent reported piracy to be a "huge problem," while another 26 percent view it as "somewhat of a problem." A full 53 percent said Google is too lax in its Android Market policies. While Google has responded to remove active malware from its software store, many malware titles have generated a quarter million downloads or more before being identified as malicious.

Android a leader in copy/paste

But Google isn't the only company selling Android apps. While its own market may be lax, there are even more permissive stores offering Android downloads, and many of these welcome illegitimately copied and republished versions of developers' apps. This is done to spread malware under the guise of functional apps (as illustrated below by research firm Lookout).

Howe reports that three quarters of Android developers said it was "easy to copy and republish an Android app," while half said that pirating Android apps is "very easy."

Recent reports by Lookout and Retrevio noted an 85 percent increase in the number of mobile malware detections and that Android users are 2.5 times as likely to encounter malware than just six months ago, but that Android users are also the least prepared and informed about malicious mobile software.

Both groups contrasted Android's security problems with the safety of Apple's iOS walled garden. Lookout specifically described a new form of malware attack ("malvertizing") directed at pushing Android users to download malware directly from websites through legitimate looking web banners within existing apps, something that isn't even possible on iOS.

Rampant Android piracy hurting more than just apps sales

In addition to lost sales, Howe stated that 32 percent of Android developers reported that widespread piracy has increased their support costs, while another quarter noted that the network load of pirated copies of their apps resulted in increased server costs.

A third of the developers said that piracy has cost them more than $10,000 in revenue, making developing for the platform less rewarding on top of the fact that Android users are less likely to pay for apps in the first place, despite the high download figures announced by Ovum.

"Android apps are living in the Wild West without a sheriff,” Howe wrote. “With five other major mobile OSs competing for consumer dollars, Google can’t afford to simply let pirates kill app developers’ businesses. They need to foster some law and order or developers will flee to other platforms and Android will lose customers.”

By Josh Ong
Published: 02:40 AM EST (11:40 PM PST)

Investment bank J.P. Morgan raised its estimates for tablet shipments in 2011 to 51.9 million units, citing the strength of Apple's iPad, while slightly lowering 2012 estimates because a "formidable number two tablet maker" has yet to arrive.

Analyst Mark Moskowitz issued a note to clients on Thursday, noting that Apple "continues to dominate and enjoy the lion's share of the tablet market." He also suggested that a true iPad competitor may not emerge until the arrival of Windows 8 late next year.

The firm raised its 2011 tablet projection from 46.1 million to 51.9 million units, while also reducing 2012 numbers from 76.3 million to 72.4 million. Moskowitz now estimates Apple's unit market share will stand at 70.9 percent at the end of this year and 62.8 percent in 2012. He predicts worldwide tablet revenues will reach $28.9 billion dollars this year.

"Beyond the iPad, there has not been another high-volume tablet offering, yet," he said. "We are still awaiting the emergence of a clear number two player, though this may not happen until the launch of Windows 8 in 2H 2012."

Moskowitz did note that a rumored Amazon tablet could be "interesting," possibly providing a lift to the non-Apple tablet market. He went on to say that the OS would likely be a weak spot for the device, though "brand name, content and distribution capabilities of Amazon" could threaten Apple's lock on the market.

Non-iPad tablet challengers will find themselves competing on price for second place, Moskowitz suggested, predicting that the Average Selling Price in the tablet market will decline 12.1 percent in 2011 and an additional 7.2 percent in 2012. Tablet makers have been aggressively slashing prices in order to move excess inventory, with Hewlett-Packard enacting the most dramatic price cut with a $99 fire sale for its discontinued TouchPad tablet.

Earlier this year, Moskowitz warned of a coming "bubble burst" for rival tablet makers because their build plans were too high. An "early dose of reality" reportedly prompted companies to dial down production of .

However, tablet makers are expected to continue waging a fierce price war this fall in preparation for the 2011 holiday season in order "to digest inventory and minimize losses," according to one report.

The analyst also cautioned that a continued surge in tablet sales is "bad news" for PCs. J.P. Morgan believes that tablets and smartphones are not only cannibalizing PC sales, but also causing consumers to defer purchases.

Apple sold 4.69 million iPads in the first quarter of calendar 2011 and 9.25 million in the second, for a total of 13.94 million tablets.

September 1, 2011 at 5:57 am

Like politics, smartphone wars come down to two major parties – Google and Apple – embroiled in a never-ending fight for consumers, especially those who have not made up their mind as to which operating system they’d like in their next smartphone. According to July 2011 data from Nielsen survey, “these ‘undecideds’ will be the ones device makers will be hoping to win over”. Interestingly, the Late Adopters among likely smartphone upgraders are the ones most likely to be undecided about their next phone platform.
The research firm discovered that forty percent Americans aged 18+ now have smartphones. Android leads the pack with a forty percent OS platform share  and iOS came in second with 28 percent. Compared to Nielsen’s June 2011 study, Android grew its share by one percentage point while iOS growth fell flat. The BlackBerry platform lost one percentage share and now stands at nineteen percent.
Of those buying a new smartphone next year, one third would opt for an iPhone and another third would go Android. This leaves other manufacturers outside the Android-iOS duopoly to fight for the remaining 33 percent of buyers.
Moreover, the smartphone is clearly on the rise…


Four out of ten Americans now wield smartphones, Nieslen says. Smartphones will continue eating into feature phones and dump phones until eventually all phones become smartphones, as predicted by Asymco’s Horace Dediu:
I don’t see non-smart devices being interesting to vendors in the near term. Each additional dumb phone added to a portfolio will decrease a company’s operating margin. The market dynamics are such that I think non-smart phones will disappear entirely from branded portfolios in 3 to 5 years.
Revenues for microelectromechanical systems in consumer electronics and mobile communications devices will grow 37 percent this year due to the rising popularity of tablets and smartphones, per this Consumer & Mobile MEMS Market Tracker report from IHS iSuppli. They also estimated that by 2015 sales of smartphones will beat dumb phones, which today account for more than two-thirds of all mobile phone sales. For more politics in smartphones, check out an amusing U.S. map telling whether you are an Android or an iOS state.
Cross-posted on 9to5Google.com