Emerging markets drive Google Play’s quest for dominance

A video game is played on a Nexus 7 tablet at a Google event in San Francisco. Pic: AP.

By Fergal Barry-Murphy

Significant increases in customer numbers  in the emerging markets of Asia and Latin America are driving Google Play’s growth as it bids to close the revenue gap on Apple’s App Store.

Google Play is already significantly ahead in terms of downloads, driven by countries like India, Thailand and Brazil where cheaper Android handsets and devices are proving more popular than their less affordable iOS counterparts. Android phones average at about $250-300 per handset, while the Apple iPhone starts at well over $600 in most markets for the most basic model.

This graphic from Benedict Evans’ excellent tech blog illustrates the dominance of Android devices in emerging markets, compared to the US where it’s a close-run thing between the two operating systems:

Also notable is the lasting popularity of BlackBerry devices in emerging markets. The ailing company’s efforts to reverse its ailing fortunes have seen some success in Southeast Asia recently with the release of new budget handsets.

The number of downloads from Google Play worldwide exceeded Apple App Store downloads by 60 percent in the second quarter of 2014, according to a new report from App Annie. The report adds that the, “explosive growth was driven by emerging markets, with Brazil continuing its rise, and Thailand and India seeing significant increases in Google Play downloads in Q2 2014.”

Most Google Play downloads were made in the US during the three months, with Brazil was in 2nd spot. The number of downloads in India spiked sharply making it the third busiest market for Google Play, with South Korea also making the top 5.

Source: App Annie.

The App Annie report also reveals that Taiwan, “Thailand, Indonesia and Vietnam also performed strongly in Google Play and experienced significant download growth quarter-over-quarter”.

While Google Play dominates in the number downloads, it still lags significantly behind the Apple Store when it comes to revenue. App Annie estimates that Apples App Store earned 8o percent more than Google Play in the second quarter of 2014. There are a number of reasons for this, not least the spending power of the respective user groups and the fact that many people in emerging markets do not have credit cards to make app purchases.

The gap between Google Play and the Apple Store is narrowing, however. Writing for Quartz, tech journalist Steven Max Patterson predicts that Google Play revenues will overtake those of the Apple Store in 2018. Judging by the the growth of activity on Google Play in the first half of this year and the increasing spending power in emerging markets, we could see a new victor in the app wars before then.