Droidcon NYC highlights Android’s non-conformity and growth potential

BY M. Chadwick Shank

Over 700 Android enthusiasts attended Droidcon, Manhattan’s first convention for the local Android app development community, where they discussed topics ranging from developing mobile apps for emerging markets to increasing mobile app audiences. Hosting the conference was Touch Lab Inc., Kevin Galligan’s Android development consulting company, which is based in Silicon Alley, the area, running from downtown through Chelsea, that is defined by the Verizon, Google, and Flatiron buildings. The vast majority of those who assembled at the Metropolitan Pavilion in Midtown West were male; of Generations X and Y; Caucasian, Asian, and South Asian; and sporting the Mark Zuckerberg look—non-descript t-shirts, ill-fitting denim, and a hoodie. App developers at the conference, while relishing their creative autonomy, debated in earnest the growth potential of Android, which has recently been overshadowed by Apple’s iPhone 6 and iOS 8.0.1 release.

Fiscal second quarter of 2014 estimates of global market share—the proportion of a company’s total sales in a given industry—show Android with a commanding lead of 84.6%, with iOS at 11.9%. Inside the U.S., it is more of a horse race, with Android at 51.9% and iOS at 42.1%. Despite this, 2014 fiscal second quarter earnings reports showed that consolidated revenue for Apple was $45.6 billion and consolidated revenue for Google, of which Android is a subsidiary, was only $15.96 billion. Of that $15.96 billion, $14.359 billion was advertising revenue and not necessarily related to Android.

The disparity in consolidated revenues between Apple and Google occurs even though more users exist for Android than iOS. Tagged, a social discovery website that has both iOS and Android mobile applications, has a user base that consists of 80% Android-users according to Johann Schleier-Smith, the company’s CTO and Co-founder—but the smaller percentage of iOS-users yields Tagged substantially more revenue than Android. “Apple has mastered the pay-for-service system by having a user’s credit card on file attached to the user’s Apple account,” said Schleier-Smith, “whereas Google is not payment-focused—they are primarily an advertising company that is uniquely competent in search.” The average iOS-user has become accustomed to paying something to acquire product and content through the iOS platform, like downloading a song from iTunes, while the average Android-user has accepted a heavier advertising presence to access product and content.

Kevin Grant, an Android engineer, said that Tumblr, a micro-blogging platform and social networking website that has mobile applications on both iOS and Android, has had difficulty monetizing the activity of mobile users due to the nature of the app. Whether on the iOS or Android platform, the app is free to download, so there is no opportunity to capitalize on a pay-for-service system, the business model that is best supported through iOS. In April 2013 Tumblr announced that it would integrate partnered advertisements into the app’s interface; one month later Yahoo acquired Tumblr for $1.1 billion. Tumblr’s mobile app business model mirrored the strength that Android provides—increased acceptance on behalf of the user for paid advertising as a form of monetization—but ultimately fell short because 68% of global mobile app 2013 revenue came from apps that adhered to the pay-for-service model, as reported by the venture capital firm KPCB’s 2014 Internet Trends Report.

The response from venture capital firms has compounded the problem of Android’s paid advertising model. According to Charlie O’Donnell, Partner and Founder of Brooklyn Bridge Ventures, venture capital firms tend to invest more heavily in companies that prioritize iOS app development over Android because it is harder to build for all the various Android versions. O’Donnell said that that venture capitalists only invest in Android app development after a company has become firmly established. “It just makes more financial and business sense to start with iOS as a start-up,” he said.

Some at the conference, including Yohanna Rizk, focused on what Android has to offer that iOS cannot. An Android mobile developer for BuzzFeed Inc., Rizk said that Android’s open-source platform inspired his creativity because it allows developers to use source code that is available to the general public. In contrast, Apple has a lockdown on both the app development approval process and iOS’s application programming interface (API), the set of programming instructions and standards, according to Grant. Grant said that if developers wanted to modify iOS’s API they would have to “jailbreak” the device—a process that is a violation of the iOS end-user software license agreement.

Amid these challenges, attendees at Droidcon NYC were optimistic and proud of their non-conformity. “Android,” said Grant, “is a great medium to get your ideas into a platform quickly with lower barriers of entry, allowing for maximum creativity.”

This entry was posted on Thursday, October 2nd, 2014 at 8:08 pm. It is filed under Uncategorized and tagged with Apple iOS, Droidcon NYC, Google Android, Technology. You can follow any responses to this entry through the RSS 2.0 feed.