Why You Could See More Android Apps Soon

Cheaper ones, too

Key Takeaways

  • Google has reduced the Play Store’s cut from 30% to 15% for the first $1 million in annual revenue an app makes.
  • Experts say the reduced cost of putting an app on the Play Store could lead to more apps being available on Android.
  • The lower percentage also could lead to fewer in-app purchases, since developers won’t need to push so hard to sustain themselves.
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Beginning July 1, Google will slash its commission fee from 30% to 15% on the first $1 million of revenue that app developers generate from the Play Store, which experts say could lead to cheaper app costs for everyday users.

Apple made a similar change last year when it also sliced its 30% take in half for developers making under $1 million each year. Such a reduction could help developers sustain an app business more easily without having to rely on in-app purchases or other microtransactions. While the move will mostly affect developers, experts also say that everyday users could see some benefits from it in the future.

“The reduction means that future app releases on Play Store will certainly cost a little less,” Alina Clark, co-founder of CocoDoc, told Lifewire via email. “Primarily, this cut will reduce the developer fees, which in turn will help reduce the cost of purchasing apps through the Play Store.”

Keeping Up With the Joneses

According to a projection by Wedbush Securities analyst Daniel Ives in December 2020, the iPhone was the year's best-selling tech product, with over 195 million units believed to have been sold. That compares to about 30 million Samsung Galaxy phones—among the most well-recognized Android devices—sold last year. Given the numbers, developers creating for iOS seem to have a much larger audience available to monetize their apps.

“Primarily, this cut will reduce the developer fees, which in turn will help reduce the cost of purchasing apps through the Play Store.”

The Play Store also is overstuffed with options. Buildfire reports over 2.87 million apps are on the Play Store, compared to the 1.96 million on the iOS App Store. This means apps on iOS have much less competition. The App Store also saw total gross app revenue of $19 billion in the third quarter of 2020, compared to the Play Store’s $10.3 billion. That's another reason iOS might seem more viable to developers, especially if they’re just getting started making apps.

“Apple’s App Store already had a competitive advantage due to having more users that are willing to pay for apps and services through their store,” Dane Hale, chief marketing officer of Twin Sun Solutions, explained in an email. “For that reason alone, most developers looking for revenue from their apps will develop for iOS over Android due the higher app-spending demographic.” 

Hale says that Android users will benefit from the latest move, since developing apps traditionally has been more lucrative for developers prioritizing the iOS store. Now that Google is following suit in cutting the percentage it takes, more developers could be inclined to start developing for the Android platform, since it has become more profitable.

Under Pressure

On the surface, lowering the percentage taken from purchases for the first $1 million might not seem like it affects the everyday user that much. That’s actually not the case.

According to Clark, one of the biggest drivers behind the prevalence of in-app purchases—and even the high base cost of some applications, themselves—is that developers have to make money to keep supporting app development. While this percentage has been the same rate since the launch of the Play Store, the cut down to 15% hopefully will give developers more room to sustain themselves.

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The high fees that the Play Store takes from developers also have been a point of strife within the development community, of late. The issue became more publicized when Epic Games’ popular free-to-play game, Fortnite, was removed from the Play Store (as well as the App Store). Epic was trying to circumvent Google’s billing policies by pushing customers to pay it directly through its website, instead of using in-app purchasing systems.

The removal kicked up a lot of attention and public scrutiny of Google’s and Apple’s policies, which Clark says is most likely the reason that we’re starting to see these fee reductions.

“One shouldn’t confuse Google’s move to reduce the commissions payable for startout developers as an act of benevolence,” said Clark. “It’s not. Instead, it’s an attempt to mitigate the current deluge of complaints and protests raised by developers in reply to Google’s competition-crushing tactics.”

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