Google Inc. (GOOG) App Revenue Gains on Apple Inc. (AAPL)

Google Inc. (NASDAQ:GOOG) has seen great success with its Android operating system in the smartphone market, as the most recent reports show that Android smartphones dictate about 70 percent of the overall market, blowing away iOS by Apple Inc. (NASDAQ:AAPL). Despite that stranglehold on the market in general, Apple has had dominance in the app download market. But in a recent report by a market research firm, it seems that Google is finally gaining some ground in app downloads – even if it still has a long way to go to catch Apple.

In a survey by market analysis firm App Annie, Google Inc. (NASDAQ:GOOG) has seen as 700 percent increase in growth in its Google Play store for Android just during the 2012 calendar year. The revenue doubled just in the fourth quarter of the year, keyed mainly by activity in Japan and South Korea, which alone accounted for nearly half of the revenue in the quarter. Japan is he leader in Google Play revenue, with the U.S. second and South Korea third. Overall, Strategy Analytics reported that Google Inc. (NASDAQ:GOOG) has established a dominant market share in smartphones, with its Android OS growing from 51 percent of the market at the end of 2011 to 70 percent at the end of last year.

While app Annie does not release actual revenue numbers – it sells that information and data to software companies – it does create index charts and figures to describe revenue growth and market share. In this new report by the firm, it shows in the App Revenue Index that while Google Inc. (NASDAQ:GOOG) app revenue increased 700 percent, the amount of revenue in December 2012 was still less than half of the revenue that Apple Inc. (NASDAQ:AAPL) made in its App Store in December 2011.

What does this mean for Apple’s revenue? Did it go down during this time?

Meanwhile, Apple’s app revenue in December was 75 percent higher than in December 2011 and about 350 percent higher than the Google Play revenue – though that is down from January 2012, when Apple Inc. (NASDAQ:AAPL) had a 1,000-percent advantage. In the good news category, Google Inc. (NASDAQ:GOOG) has had games be the largest downloads, with South Korea posting about 95 percent of its total Google Play downloads were gaming apps, while Japan had about 90 percent game downloads and the U.S. about 75 percent. Overall, the Apple App Store has about 800,00 apps, and the Google Play store has about 700,000.

What do you think about this report? Can Google Inc. (NASDAQ:GOOG) truly make up ground on Apple Inc. (NASDAQ:AAPL), or is the revenue gap too large? With an app store that is nearly as stocked as Apple’s and a much larger share of the market, why do you think Google is so far behind? What would it take for Google to catch up? We’d like your thoughts in the comments section below.

DISCLOSURE: I won no positions in any stock mentioned

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