Android Or iOS Dominating Tablets? Developer Economics Has The Answer

Android is big in tablets. The problem is that no one has a clue how big it is. While Apple happily reports its rising unit sales for tablets, Samsung and other major Android distributors keep mum. Hence, we're largely left in the dark as to just how many Android tablets are being bought and used.

But developers may help us understand Android's market penetration.

Android's 'Dark Matter'

By some estimates, Android will claim as much as 65% of the tablet market in 2014. IDC puts the number a bit lower, but by any estimate Android is booming.

As in smartphones, Android adoption is on overdrive due to giving consumers, particularly in developing markets, a low-cost alternative to Apple's premium pricing. Commenting on Android's rise, Canalys senior analyst Tim Coulling argues that "Apple’s decline in PC market share [which includes tablets] is unavoidable when considering its business model."

Well, maybe.

The problem is counting Android accurately. Asymco analyst Horace Dediu, commenting on Benedict Evans' analysis of Android use, highlights the difficulty in getting an accurate read on Android tablet adoption:

There are no firms which report their shipments

They are not sold through retail chains which normally are sampled in the US and Europe (NPD and GfK respectively.)

They don’t show up in browsing or ad transaction data

Google Play statistics are missing most of the activations since they are not sold as bona fide Google-sanctioned Android.

It should be easy to track Android adoption by measuring web traffic. Yet Android users lag considerably behind iOS users - on smartphones and tablets - when it comes to web usage, something I pointed out a year ago. Dediu posits that Android tablets must be used as glorified video consoles, and maybe he's right.

But his more interesting suggestion is that we can track tablet adoption by measuring payments to developers.

A Market Is Big When Developers Get Paid

Commenting on why some popular technologies like the video CD die quickly, Dediu declares that developer interest ensures a technology sticks around. And developer interest ultimately comes down to cash:

Whether the dark matter Video-only Android device will come to swamp the iPad will depend not on just volume shipments in select geographies. It will depend largely on the ecosystems built around it. The ecosystems of VCD were largely unsustainable because there was no value placed on the content itself. The value chain did not strive to sustain the technology. When something better came along, it got dropped.

In contrast, content-based value chains sustain technologies which keep the revenues coming. And we can measure this revenue.

You don’t need to look too hard for that in tablets. Apple states it quite frequently: total payments to developers.

Not long ago Apple announced that developers had minted $13 billion selling apps for the iOS platform. Google doesn't report similar data for Android, in part because it can't due to the fragmented Android ecosystem, but Business Insider has compiled its own statistics, which show Android well behind iOS but closing the gap:

Android developers are likely to get paid even more going forward, as Google has significantly ratcheted up its efforts to improve monetization for Android developers. Indeed, speaking at Google I/O earlier this year, Google's VP of Android product management Hugo Barra told I/O attendees that Google had paid more to Android developers in the 4 months leading up to I/O than the previous 12 months before that combined.

Closing The Developer Payment Gap

However dim our insight may be into actual Android shipments and adoption, it's likely to get better as Google improves developer monetization and (hopefully) starts reporting Android developer payments, as Apple does. Given the very real possibility that Android tablets remain a limited-use alternative to the iPad's multi-use playground, one would expect payments to Android tablet developers to fall far short of what Apple pays iPad developers.

But if, in fact, we see Android developers banking equal or greater amounts of money from this allegedly "dark" adoption, then it will tell us that our understanding of Android usage patterns is way off. Either way, the answer lies in developers.