Android’s Success Has Aided Substantially
Android is very dominant in the mobile OS space with more than 750 million mobile devices using the operating system. Largely fueled by the wild success of Android across the globe, Google Inc (NASDAQ:GOOG)‘s Play store has been gaining tremendous momentum in getting more users, downloads and most importantly, revenues.
According to App Annie, in Q1 CY2013, Google Inc (NASDAQ:GOOG) Play has achieved higher growth rates than the iOS App Store for both downloads and revenues. While Google Play reached close to 90% of the iOS App Store downloads in the past quarter, the iOS App Store maintained its strong lead in monetization, earning about 2.6x the app revenue of Google Play, which was 4.0x in Q4 CY2012. The U.S. and China were major contributors for Apple’s App store, whereas, Japan, Russa and South Korea played an integral part in Google Play’s download and revenue numbers.
Google Play has a large and wide assortment of free and cheap games, which make up a large portion of total downloads. However, Google monetizes a lot of apps by placing ads on them, and makes a large number of these apps free. And often times, the same apps on iOS are paid apps.
Google Inc (NASDAQ:GOOG) Play’s content catalog should see a sizable increase down road as it partners with more movie studios, music companies, publishers to add more content. Going forward, Google Play should see more incremental downloads as more and more Android-based phones enter the market from various manufacturers (OEMs).
Eric Schmidt of Google recently stated that Android-based phones should cross the billion dollar mark soon, because companies can freely tinker and customize Android. The number of Android activations hit a staggering 1.5 million per day. In addition to substantial content and advertising revenue driven by Android adoption, Google monetizes increased search volumes on mobile as well.
Strong ecosystem is crucial for long-term success
Firms that offer a great holistic ecosystem with their hardware offerings will grab market share from competitors. Apple Inc. (NASDAQ:AAPL)’s offering can be categorized as more high-end, compared to Google Inc (NASDAQ:GOOG)’s Nexus 7 and Amazon’s Kindle Fire line. However, all three can gain more market share in the tablet space as consumers adopt more mobile devices.
More connected devices will lead to consumers spending more time online browsing and buying content from the respective platforms. As a result, a strong ecosystem will contribute to enhancing the moat of these tech giants, even in the face of intensifying competition.
The article Ecosystems Are Widening Moats originally appeared on Fool.com and is written by Ishfaque Faruk.
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